Nov

Landlords to face penalties if they earn kick-backs from referring utilities to tenants

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Landlords will soon have to be transparent about referral fees when they recommend services such as utilities to tenants, a senior Trading Standards chief has warned.

James Munro made the comment yesterday during a Propertymark webinar after being asked whether landlords are covered by his organisation’s proposed new approach to referral fees within the property industry.

Munro heads up the National Trading Standards Estate and Letting Agency Team which despite its name covers anyone letting out properties including landlords, and wants to clamp down on referral fees harder.

Although existing Consumer Protection Regulations (CPRs) already cover referral fees Munro says they are too vague and he has recommended to Ministers that more specific regulations are introduced.

Capacity as a landlord

“The CPRs apply to all businesses not just sales and lettings agents; there is case law to suggest that when private landlords are acting in the capacity of a landlord they are not private individuals [but instead] are a business, and therefore the CPRs apply to them,” he says.

“This would include when they recommend a service, but it’s a complicated scenario so we will provide clarification at a later date.”

Sean Hooker (pictured), Head of Redress at the PRS, says: “Landlords are increasingly being held to the same standards as agents.

“They must abide by the same laws and act as professionally as any business.

“We are moving towards a more regulated environment in England, with landlord redress, registration and regulation around the corner. “Landlords should therefore be abiding by this guidance, especially if they are company landlords and acting in a commercial capacity.

“Smaller landlords may well want to use a good and compliant agent who can protect their interests.”

Read more about trading standards.

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