Letting agent fees

Unfair or Excessive Agent fees are one of the most common consumer complaints raised against letting agents. The Consumer Rights Act 2015 requires letting agents to publicise their fees and statements regarding their membership of client money protection and redress schemes.

A comprehensive list of all fees, charges or penalties which are payable by the landlord or tenant before, during or after the tenancy must be prominently displayed by the letting agency. The list should be displayed where the letting agent comes face-to-face with an existing or new customer and the customer shouldn’t have to ask to see the list; it should already be clearly visible. If the agency has a website, then the list of fees should also be published there. Fees should be clear and specific without surcharges or hidden costs. Although the level of fee charged can still be determined by the agent “generic terms such as ‘administration fee’ are no longer acceptable and all charges should be displayed inclusive of tax.

Under the new legislation Letting agents must also be registered with one of the three government-approved redress schemes; The Property Redress Scheme, The Property Ombudsman, or the Ombudsman Services: Property. It should be made clear which scheme they are a member of by using a window sticker and displaying the redress scheme logo on their website. Redress schemes, which became a mandatory requirement in October last year allows tenants and landlords to raise a complaint against their letting agent if they’re unsatisfied with the way their complaint has been handled.

Letting Agents must also make it clear to their customers whether they are part of a Client Money Protection (CMP) scheme or not. By not disclosing the true position agents are in breach of the legislation. It is not a mandatory requirement to provide CMP. However, it is a legal requirement to make clear to consumers whether or not they are covered by a CMP scheme or not. Silence on the subject is considered a breach of the legislation.

The Act will be enforced by Trading Standards and any noncompliance from the agent could incur a fine of up to £5000. Agents will not avoid prosecution or penalty by claiming they did not know about the changes. It appears that a large number of letting agents are still not displaying their fees in accordance with the new regulations.

Earlier this month, Sheffield City Council announced that it had in the previous six weeks fined 11 letting agents a total of £37,000 for not belonging to a redress scheme.
The council said it had investigated 200 letting agents in the city. Now an agent in Sheffield who has asked for anonymity has asked the council to look at a spreadsheet it has drawn up of  its competitors not displaying their fees. The spreadsheet appears to show the astounding extent to which the law is being flouted, with the large majority of letting agents not showing any fees at all on their websites. Out of 81 on the list, just four are compliant, meaning that 77 are non-compliant. A handful of nine show some, but not all, fees.

The situation in Sheffield suggests that Trading Standards Authorities in all parts of the country should be looking at this issue of non compliance.

Parkinson Property

4th August 2015

 

 
 
 
 
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