LAW-breaking letting agencies could face fines of up to £5,000 as a result of an investigation by a local authority.

The Northern Echo has learnt that Darlington Borough Council has served formal notice on a number of letting and property management agents in the town of its intention to take action against them.

The companies concerned, who are not being named at this stage, were operating without being the member of an approved redress scheme.

Last October, a new law came into force meaning letting agents have to be the member of at least one of three redress schemes – the Property Ombudsman Scheme, Ombudsman Services Property and The Property Redress Scheme.

But some companies ignored or were unaware of the changes which are intended to allow tenants who feel they have had a poor deal to complain and potentially receive compensation.

The Echo understands two of the companies targeted by the council are appealing the decision to prosecute them, while another of those implicated now has new owners after subsequently changing hands.

Lynn Smith, from Hutton Magna, Richmond, North Yorkshire, wrote to Darlington Trading Standards to complain about one of the firms involved in the investigation.

She said: “I rented a property with them, but it was falling to pieces and uninhabitable. I subsequently discovered that the agent was not registered with one of the three redress schemes.”

Ms Smith, who said she had suffered health problems as a result of her experience, won a small claim court case against the landlord whose property it was.

Referring to the letting agency she said: “I sincerely hope they will be prosecuted and fined, not just warned.”

Councillor Chris McEwan, Darlington Council cabinet member for economy, regeneration and licensing, said: “Access to a redress service is very important for private tenants and landlords if problems arise.

“We take the rights of tenants very seriously and will crack down if we find agents breaking the law.”

A spokesman for the UK Association of Letting Agents (UKLA) 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.”