Agenda item

To consider and endorse, or make recommendations to the Cabinet Member for Community and Regulatory Services on the proposed decision to agree: to the use of financial penalties for letting agents who fail to comply with the requirements of the Consumer Rights Act 2015; to set the financial penalty level at the Statutory Maximum of £5,000 for letting agents who fail to comply with the requirements of the Consumer Rights Act 2015 (to be reviewed annually);

to delegate authority to the Head of Trading Standards to determine any reduction in the financial penalty if they are satisfied that there are extenuating circumstances (each case to be considered on its own merits and in accordance with the Enforcement Policy); and to delegate authority to the Head of Trading Standards to review and decide the level of future financial penalties attributable to the Consumer Rights Act 2015 (as amended) in consultation with the Cabinet Member as required.  The monetary level of financial penalties attributable to the Consumer Rights Act 2015 (as amended) will be reviewed annually as shown at Appendix A.

Katie Stewart (Director of Environmental, Planning and Enforcement) and Steve Rock (Head of Trading Standards) were in attendance for this item.

1. MR M Hill, OBE (Cabinet Member for Community and Regulatory Services) introduced the report which set out the new legislation for letting agents under the Consumer Rights Act 2015.

2. Mr Rock informed Members that the change in legislation under the Consumer Rights Act 2015 made it a requirement for letting agents to display certain information at their premises and on their website. If they failed to comply with the legislative changes, Kent County Council as the Local Weights and Measures Authority would exercise its duty and impose a £5,000 penalty. The proposed decision sought the Cabinet Committees agreement to set the financial penalty level at the statutory maximum of £5,000 and for the Cabinet Member of Community and Regulatory Services to delegate authority to the Head of Trading Standards to determine any reduction in the financial penalty in accordance with extenuating circumstances. Mr Rock assured Members that before any financial penalty was imposed upon a letting agent, the Local Weights and Measures Authority had to serve a notice of intent setting out the amount of the proposed financial penalty, the reasons for proposing to impose the penalty, and information on the letting agents rights to make representations. If the letting agents still fails to comply, a final notice could then be served by the council and the letting agent must pay that penalty within 28 days. KCC would have the discretion to reduce the amount specified in a notice of intent or final notice.  The duty of the letting agents could be found within Annex D within the pack.

3. Members enquired about the set penalty level and whether this could be start at a reduced rate and then be increased. Mr Rock explained that the government guidance indicated that there would be an expected £5,000 fine and that a lower fine should only be charged if the enforcement authority was satisfied that there were extenuating circumstances. The proposed decision aimed to bring fairness and transparency to consumers and Landlords which would therefore support them in making an informed decision before selecting an agent or property. Mr Rock reminded Members that it was a civil penalty and that letting agents had a right of appeal to dispute the fee. It was more cost effective for KCC to use the new legislation as a tool for change rather than go through the legal proceedings of prosecution.

4. In response to Members queries about the review and decisions around the reduction of financial penalties, Ms Stewart confirmed that authority would be delegated to the Head of Trading Standards. However, with regard to future penalty levels, if there was a change in legislation, this decision would be made in conjunction with the Cabinet Member for Community and Regulatory Services and potentially go to Cabinet Committee for endorsement. Mr Hill (Cabinet Member for Community and Regulatory Services) assured Members of his involvement and oversight.

5. In response to members queries around the financial regeneration, Mr Rock confirmed that the financial proceeds of any financial penalty would be used for the purposes of the Trading Standards Services.

6. RESOLVED that the Cabinet Committee endorse the proposed decision to the Cabinet Member for Community and Regulatory Services on the proposed decision to agree to:

(a)   to the use of financial penalties for letting agents who fail to comply with the requirements of the Consumer Rights Act 2015;

(b)   to set the financial penalty level at the Statutory Maximum of £5,000 for letting agents who fail to comply with the requirements of the Consumer Rights Act 2015 (to be reviewed annually);

(c)    to delegate authority to the Head of Trading Standards to determine any reduction in the financial penalty if they are satisfied that there are extenuating circumstances (each case to be considered on its own merits and in accordance with the Enforcement Policy); and

(d)   to delegate authority to the Head of Trading Standards to review and decide the level of future financial penalties attributable to the Consumer Rights Act 2015 (as amended) in consultation with the Cabinet Member as required.  The monetary level of financial penalties attributable to the Consumer Rights Act 2015 (as amended) will be reviewed annually as shown at Appendix A.