Construction & Property Property and lettings compliance

Set up a property letting business

Five mandatory compliance requirements for lettings agents operating in England. Register before you trade to avoid penalties up to £30,000.

UK-wide
Guide summary

You must complete five registrations before starting a property letting business in England. Join a redress scheme and client money protection scheme, register for AML supervision, check your fees comply with the Tenant Fees Act, and verify property EPC ratings. Penalties range from £5,000 to £30,000 for non-compliance.

  • Join a redress scheme (TPO or PRS) before trading
  • Join a Client Money Protection scheme before holding client money
  • Register with HMRC for AML if managing high-value properties
  • Check fees comply with Tenant Fees Act 2019
  • Ensure properties have minimum EPC rating E
  • Redress scheme fine: £5,000 per branch
  • Client Money Protection fine: up to £30,000
  • Tenant Fees Act fine: up to £30,000 for repeat breaches
  • EPC rating penalty: up to £4,000 per property
  • AML registration cost: £400 per premises
On this page
UK-wide

Related guides in Leasing Property

Complete five registrations before you start trading as a lettings agent in England. Trading Standards and HMRC enforce these requirements with penalties from £5,000 to £30,000 for non-compliance.

Pre-trading checklist

  1. 1

    Join a redress scheme

    Register with The Property Ombudsman (TPO) or Property Redress Scheme (PRS). Required before you trade. £5,000 fine per branch if not registered.

  2. 2

    Join a Client Money Protection scheme

    Required before you hold any client money (rent, deposits, landlord funds). Six approved schemes available. Up to £30,000 fine for non-membership.

  3. 3

    Register for AML supervision

    Register with HMRC if you manage properties yielding €10,000 or more per month. Estate agents must register regardless of value. £400 per premises.

  4. 4

    Review your fee structure

    Check your fees comply with the Tenant Fees Act 2019. Most tenant fees are banned. Up to £30,000 fine for repeat breaches.

  5. 5

    Check property EPC ratings

    Verify all properties you let have minimum EPC rating E. Register exemptions if needed. Up to £4,000 penalty per property.

1. Tenant Fees Act compliance

The Tenant Fees Act 2019 bans most fees charged to tenants and caps holding and security deposits.

2. Client Money Protection

Join a government-approved Client Money Protection (CMP) scheme before you hold any client money. This includes rent, deposits, and landlord funds.

3. Redress scheme membership

Join a government-approved redress scheme so tenants and landlords can complain free of charge if something goes wrong.

4. Anti-money laundering registration

Register with HMRC for AML supervision if you manage properties yielding £10,000 or more per month. Estate agents must register regardless of transaction value.

5. Energy efficiency standards

Check all properties you let have a minimum EPC rating of E before marketing them. Properties rated F or G cannot be let unless you register a valid exemption.

Construction & Property Exemption

Lettings agents vs estate agents

Scope difference: Estate agents (property sales) must register for AML with HMRC regardless of transaction value. Lettings agents only register if managing properties yielding €10,000+ per month. Both require redress scheme membership. CMP applies only to agents holding client money. If you operate as both lettings and estate agent, meet requirements for both activities.

Enforcement and penalties

Local Trading Standards enforce CMP, redress, and Tenant Fees Act requirements. HMRC enforces AML registration. In 2017-2019, 46% of inspected lettings agents in London were non-compliant with redress scheme requirements.

Tenant Fees Act breach (first)
Up to £5,000 fine
Tenant Fees Act breach (repeat within 5 years)
Up to £30,000 or criminal prosecution
No CMP membership
Up to £30,000 per breach
No redress scheme membership
£5,000 per branch
No AML registration
Criminal prosecution
Letting F/G rated property (3+ months)
£4,000 penalty