The Accommodation Agencies Act 1953

Commencement:

The Act came into force on 14th July 1953.

Background:

The Act was originally passed as a short-term measure.  However, after a series of annual renewals, it was made permanent by s1 of the Expiring Laws Act 1969.  Although the legislation was introduced over 40 years ago, it is still actively enforced and there have been several cases with convictions in the last few years.  The Act was introduced to prevent agencies from taking fees in advance from prospective tenants in return for details of properties.

Scope:

The legislation applies to firms offering properties to let and their dealings with persons seeking such accommodation.

Requirements:

Section 1(1) of the Act provides that a person shall be guilty of an offence if that person :-

(a)  demands or accepts payment of any sum of money in consideration of registering,  or undertaking to register, the name or requirements of any person seeking the tenancy of a house or dwelling;

(b)  demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses or dwellings to let;

(c)  issues any advertisement, list or other document describing any house or dwelling  as being let without the authority of the owner of the house or his agent;

Interpretation:

Agents cannot charge prospective tenants for lists, addresses or details of properties that they have in their possession, and the Act is quite clear in this respect.

Where the agent undertakes to find suitable accommodation for a prospective tenant, the Act is less clear.  As a general rule, the agent is at liberty to act either for a landlord or for a tenant (and accordingly to charge the appropriate commission).  The only restriction placed upon the agent by the general law is not to act for both.  Thus relocation agents may charge tenants for finding specific accommodation which includes advertising their individual requirements.

The 1953 Act has been considered by the higher courts in a number of cases which help define how the Act should be interpreted.  It has been decided that where an agent takes a deposit or fee, refundable on demand,  where the deposit is not in respect of any particular property, an offence is committed (McInnes v Clarke [1955] 1 W.L.R 102).  Yet, in another case (Saunders v Soper [1974] 3 All ER 1025) where an agent asked clients to sign an agreement under which a fee would become payable if and when they took accommodation found for them by the agent, it was decided that the payments related to the finding of suitable accommodation and not for the supplying of an address.  Thus no offence was committed.

These interpretations by the courts imply that an amount chargeable at any time before the prospective tenant finds acceptable accommodation is an illegal payment, even if deemed returnable in the event  of the prospective tenant not finding accommodation.  Yet, an agent may legitimately charge for finding accommodation for a tenant who actually takes it, but may not demand a fee (even a returnable deposit) for merely supplying him with the address in the first place.

Recommended Action:

Where an agent or firm undertakes to find accommodation for a client in return for payment of a fee, it is advisable for the agent to enter an agreement with the prospective tenant under which such fee would only become payable if suitable accommodation was found. 

Agents should not take any deposit, whether or not it is refundable, where the deposit is not in respect of any specific property.

Agents should check their policies with regard to registration of clients, issuing of lists, and the advertising of properties generally.  Where doubt remains, firms are advised to contact their local Trading Standards Office. 

Agents must ensure that the purported owner of the dwelling is in fact the true owner.  In a recent case (Islington Borough Council v Winkworth, 1997), the purported landlord held no title - the property was a council house and the agent was prosecuted under this Act.  If there is the slightest doubt, check with the Land Registry.

Exclusions:

A person shall not be guilty of an offence under the Act :-

-  by reason of his demanding or accepting payment from the owner of a house or dwelling of any remuneration payable to him as agent for the said owner. (s1(2))

-  by reason of his demanding or accepting any payment in consideration of the display in a shop, or of the publication in a newspaper, or of  any advertisement or notice, or by reason of the display or publication of an advertisement or notice received for the purpose in the ordinary course of business. (s1(4))

A Solicitor shall not be guilty by reason of his demanding or accepting payment of any remuneration in respect of any business done by him as such (s1(3))

Penalty & Enforcement:

The maximum penalty for non-compliance is a summary conviction at a level 5 (currently £5,000) and/or imprisonment for a term not exceeding 3 months.    The legislation is enforced by the Trading Standards Officer who will collect evidence of unfair practice and forward it to the Office of Fair Trading.

Other Regulations:

Trade Descriptions Act 1968, s14 (knowingly or recklessly making a false statement about accommodation)

Consumer Protection Act 1987, s20 (giving a misleading indication as to price at which accommodation is available).  

Sources for Further Information:

• Local Trading Standards Office
• Copy of the Accommodation Agencies Act 1953
• The Letting Centre, website: www.letlink.co.uk

This summary is intended to assist landlords and letting agents to understand the effect of the Act.  It is not an authoritative interpretation - this is a matter for the courts.  For more detail, you should refer to the text of the Act itself