The Real Impacts of Non-Compliance for Letting Agents

For letting agents, compliance with ever-evolving regulations isn’t just a legal obligation. It’s essential for protecting financial stability and tenant safety.

Non-compliance might seem like a cost-saving measure, but the risks, including fines, legal battles, and damage to reputation, can be far more expensive.

In this blog, the Allen Goldstein team highlights 20 key compliance areas, the risks of ignoring them, and the potential costs your business could face.

The Facts: Non-Compliance Risks & Costs

From the upcoming AML regulations to Stamp Duty, here’s a complete list of non-compliance risks letting agents must remember.

AML Regulations (from May 2025)
The Risk: Letting agents must report suspected sanctioned clients to OFSI
Potential Cost: Unlimited fines; criminal charges

Building Safety Act 2022
The Risk: Applies to high-risk buildings over 18m or 7 stories. Requires accountable persons and safety case reports
Potential Cost: Fines up to £10 million; criminal charges

Consumer Protection Regulations
The Risk: Misleading property descriptions, even if accidental
Potential Cost: Uncapped fines; legal action

Defective Premises Act 1972 (Amended 2022)
The Risk: Landlords can be sued for negligence causing harm
Potential Cost: Unlimited damages claims

Deposit Protection
The Risk: Deposits must be registered within 30 days, with prescribed information
Potential Cost: Fines up to 3x the deposit amount per breach

Electrical Safety
The Risk: Ongoing checks beyond the 5-year EICR often neglected
Potential Cost: Fines up to £30,000

Fire Risk Assessments
The Risk: Applies to all non-domestic/common areas, not just HMOs
Potential Cost: Fines from £5,000 to unlimited; criminal liability

Fitness for Human Habitation Act 2018
The Risk: Tenants can sue if property is unfit
Potential Cost: Compensation claims; unlimited fines

Furniture and Furnishings (Fire Safety)
The Risk: Rented furniture must meet fire resistance standards
Potential Cost: Fines up to £5,000 per item; liability for tenant harm

GDPR and Data Protection
The Risk: Requires audits, breach protocols, and third-party agreements
Potential Cost: Fines up to £17.5 million or 4% of turnover; legal claims

HMO Planning Permissions (Article 4)
The Risk: Some councils require planning consent for HMOs, even without a license requirement
Potential Cost: Fines; enforcement notices; property devaluation

ICO Registration
The Risk: Required for agents processing personal data
Potential Cost: Fines from £4,000, higher if left unpaid

Japanese Knotweed and Other Invasive Species
The Risk: Landlords must prevent the spread of invasive plants
Potential Cost: Fines of up to £5,000; ASBOs for breaches

Legionella Risk Assessments
The Risk: Mandatory even for single-occupancy properties
Potential Cost: Unlimited fines if an outbreak occurs

Material Information
The Risk: Agents must provide key details upfront
Potential Cost: Fines and legal action from Trading Standards

Minimum EPC Standards
The Risk: Properties must meet EPC E now, and C by 2028
Potential Cost: Fines up to £5,000 (domestic) or £150,000 (commercial)

Property Licensing
The Risk: Local councils introduce schemes with little notice
Potential Cost: Fines up to £30,000; rent repayment orders

Right to Rent Checks
The Risk: Failure to verify tenant eligibility
Potential Cost: Fines up to £20,000 per tenant; criminal prosecution

Smoke and CO Alarms
The Risk: Must check alarms at tenancy start
Potential Cost: Fines up to £5,000 per property; liability for harm

Section 21 and 8 Reform (pending Renters’ Rights Bill)
The Risk: Changes may impact eviction rights and notice periods
Potential Cost: Legal fees; lost rental income

Stamp Duty Land Tax and ATED
The Risk: Applies if properties are company-owned or exceed thresholds
Potential Cost: Tax liabilities; penalties for non-disclosure

Other Costs of Non-Compliance

The costs detailed above aren’t the only risks letting agents face. Non-compliance with regulations can have other serious consequences.

Fines and penalties can quickly add up, cutting into your business profits. But that’s not the only negative impact. A damaged reputation is hard to rebuild, and tenants and landlords may lose trust, leading to negative reviews and loss of business.

Legal action from non-compliance can further drain resources, with costly lawsuits and potential compensation payments. Additionally, non-compliant agencies may face higher insurance premiums or even denial of coverage.

Working With Experts For Lettings Success

The administrative burden of correcting non-compliance can increase workload and stress, diverting attention from business growth. Compliance is not just a legal requirement—it’s a key factor in sustaining a successful agency, and you don’t have to face it alone.

Allen Goldstein helps landlords stay compliant, avoid penalties, and protect their investments.

Our expert team is here to provide tailored solutions, reducing risks and administrative burdens while ensuring long-term success and profitability.

Start the conversation today. Or send an email to enquiries@allengoldstein.com or call 020 7183 4101

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