Action following our report on letting agent fees and charges

In 2016 Citizens Advice Maidstone produced a report, Letting In The Light, on the fees and charges to prospective tenants of a number of residential letting agents operating in Maidstone.

Researchers undertook a web survey and followed it up with an extensive mystery shopping exercise.

They found

  • Wide differences between agents in fees and charges and what was being charged for.
  • Information on fees and charges often hard to locate on websites and in some cases non-existent, contrary to Advertising Standards Authority requirements.
  • Excessive fees; for example customers required to pay between £150 and £360 for their credit check, though an extensive credit check can be obtained for £49.99.
  • Bewildering  and confusing charges; such as “application fee”, “registration fee”, “documentation fee”, “inventory fee”, “set up fee”, “check in fee”, “check out fee”, “admin fee” and “tenancy deposit fee insurance”
  • “All-in-one” fees which could not be broken down further.
  • Lack of upfront information on refunds- what fees and charges could be refunded should the tenancy not go ahead, and under what circumstances any refund would be given.
  • Lack of upfront information from agents regarding their deposit protection and redress schemes.
  • Examples of letting agents who were not willing or able to give information on their fees and charges on the telephone.

Bonny Malhotra, CEO of Citizens Advice Maidstone said, “This report shows that the market in letting fees and charges is not working. People choose property to rent and often have no choice over the letting agent that goes with the property. As a result there is little incentive for costs to prospective tenants to be reduced. This is a national issue which we have referred to our national body, Citizens Advice.

Up-front fees and charges to prospective tenants, other than rent and a refundable deposit, are banned in Scotland and we would like to see the same here in England. Letting Agents are selling a service to landlords and this puts landlords in a better negotiating position over fees and charges than prospective tenants.

If there are going to be up-front fees and charges, many residential letting agents are going to have to be more open and transparent about them. We will be working with others to help improve practice.

If you think you have been misled then you should contact Citizens Advice Consumer Helpline on 03454 040506. The line is open Monday to Friday from 9 am until 5 pm.”

Notes

Citizens Advice Maidstone has been participating in the 2015 national Citizens Advice campaign, Settled and Safe: a Renter’s Right, aimed at improving practice in the private rented sector

The Advertising Standards Authority (ASA) has previously made it clear that letting agents need to clearly outline their fees on any adverts they publish, on or offline, for their rented homes. However this requirement has now been extended and enforced in law. Since 27 May 2015 the Consumer Rights Act 2015 has introduced a new obligation for letting agents in the private rented sector in England and Wales to also publicise the following within their offices;

  • details of the fees they charge
  • whether or not they are a member of a client money protection scheme
  • details of the redress scheme they have joined (England only)

The intention of the legislation is that both landlords and tenants will know, or be able to calculate, exactly what they will be charged and when.   The requirement is enforced by Trading Standards who can impose a financial penalty of up to £5,000. It does not apply to local authorities who find residents tenancies in the private rented sector.  The Scottish Government clarified Scottish rent laws in 2012, specifying that any tenant fee beyond rent and a refundable deposit was illegal.

The full report is attached below.

For further information on this report, contact Ian Park, Citizens Advice Maidstone on 01622 750770

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