A number of letting agencies and property management companies in Darlington have been served with fines of up to £5,000 by the local council, after an investigation flagged up that they were failing to comply with legislation.
The companies highlighted by the investigation have had their anonymity protected at this stage, but Darlington Borough Council is understood to have given formal notices to any business that is not a member of an approved reimbursement scheme.
Since October last year, letting agents have had a legal duty to maintain active membership of at least one of three official property redress schemes, which allow tenants to lodge a formal complaint if they have a bad experience while giving them the opportunity to claim compensation.
These schemes include: the Property Ombudsman Scheme, Ombudsman Services Property and The Property Redress Scheme.
However, some firms across the UK are still choosing to ignore the rules, as demonstrated in Darlington.
Two of the companies that have been given fines by the council have taken legal action to appeal the decision, while another business has since been taken over by new owners.
A UK Association of Letting Agents (UKLA) spokesman said: “It’s a year since all letting agents have been required to join a redress scheme so there’s no excuse for those who are yet to comply.
“Agents who join UKALA are automatically enrolled with Ombudsman Services: Property, one of the three government approved providers of letting agent redress.”