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Redress Scheme reminder – register or face a fine

Published: Tuesday, 17th January 2017

Birmingham City Council is issuing a New Year reminder to Letting Agencies and Property Managers – register with a Redress Scheme, or you could face a £5k fine.

On 1 October 2014, the government brought in new rules which mean that all Lettings Agents and Property Managers involved in letting agency work and/or property management work in the private rented sector are required to be registered with a Secretary of State Approved Redress Scheme.  The current approved redress schemes are: The Property Ombudsman Limited, Ombudsman Services and Property Redress Scheme, and registration can be as little as £95 (+VAT) per year.

When a local authority is satisfied, on the balance of probabilities, that a person who is required to register has not registered with a Redress scheme, they can apply a monetary penalty up to a limit of £5,000.

Case Study:

  • Last year Birmingham City Council successfully prosecuted a Lettings Agency that had failed to register with a Redress Scheme.
  • The council investigated the Birmingham–based company after a member of the public contacted the council’s private rented services team and a notice to impose the maximum financial penalty of £5,000 was served on 20 November 2015.
  • The company appealed against the imposition of the penalty to a First Tier Tribunal.  After taking into consideration the written submissions of both parties the Tribunal reduced the penalty to £4,200 – still a sizeable sum given that registration would have cost the company just a little over £100. 

Birmingham City Council’s cabinet member for housing and homes, Cllr Peter Griffiths, said: “The idea behind the Redress Scheme is to help tenants with a range of issues such as letting agent fees, inaccurate property descriptions, disputes over deposits and rent not being passed onto their landlord.  Registration is simple and relatively cheap at £95 plus VAT.  If you don’t register you could face a fine of up to £5,000.”

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