The Homeless Charity Shelter have been accused of drumming up an unnecessary storm within the lettings industry for what many believe as being short sighted, unreasonable, and costing working Tenants thousands of pounds in rent hikes.
Recently in Scotland, Shelter were successful in having an ancient Scottish Law clarified, resulting in the banning of all Tenant Fees by Landlords and Letting Agents across Scotland. This then sent shockwaves through the rest of the UK lettings industry.
Research in Scotland has already shown that although Tenants have benefited from saving on an application fee at the beginning of their Tenancy, Landlords and Letting Agents’ have been forced to increase rents to cover their losses. As a result, it now means that working Tenants are suffering an increase in rents up to ten times higher than if they had just paid the one off application fee at the beginning of their Tenancy.
Despite this, Shelter are determined to bring this ruling to England, where fortunately for Landlords and Letting Agents here, there is no pre-existing English law that prohibits the charging of additional premiums in relation to a Tenancy.
The Lettings Industry has boomed in recent years and starting a letting agency has been an increasingly attractive proposition to those who are looking for new work opportunities in the private sector. Anyone can set up a letting agency (http://www.lettingvision.co.uk/letting-agency-business-package/) at present making this an attractive new business venture.
With more and more government dependent Tenants relying on the private rental sector, groups such as Shelter have said Tenant fees are unfair on those who are vulnerable and who claim housing benefits, and this is why they want all Tenant Fees banned across the country.
Letting Agents argue that their fees need to be adequate enough to cover the cost of licensing costs, business rates, insurances and wages, and say its ridiculous for Shelter to suggest that credit checks should be charged at actual cost. After all, why should Letting Agents and Landlords pick up the bill as a result of successive governments selling off social housing stock.
Regarding Fees, one may ask why a letting agent is treated any differently to any other company within the private sector. If you were employing a solicitors firm, you would not expect to just pay for their paper and ink and receive the rest of the service for free. Also, when booking a holiday, you wouldn’t expect not to pay the tour operator, just because they were also being paid by the hotel.
Martin and Co have argued that Shelter have crossed the line in terms of lobbying to help the likes of Doctors, politicians and teachers save on letting fees and this could land them in bother with the charity commission, whose job is to ensure that those organisations claiming charitable status are rightly doing so, otherwise they should be seen and taxed the same as any other corporation. This has opened a case for legal action which Martin and Co have taken initiative on are in the process of bringing agents together across the UK, generating the necessary funds to legally take on Shelter.
Ian Wilson from Martin and Co said “It is a charity and it benefits from tax advantages because of its charitable status,” he says. “It has to expend its efforts on its charitable aims and if it strays into other political activities such as helping teachers, doctors and journalists reduce their household bills by avoiding paying letting agents’ fees, then it should be reported to the Charity Commission and tied up in legal action through the courts.”
Martin and Co are currently searching for 50 other agents in the UK to put in a thousand pounds each to cover the legal fees to take on Shelter. It will be interesting to see how Shelter respond to this threat, however it is evident that Letting Agents are quite keen to defend themselves in an industry where they claim the vast majority of trading agents are honest, hardworking people offering an essential service to their community.
Article Courtesy of Anthony&Co