Letting agents have come under fire again for charging unfair fees to landlords.
The Property Redress Service, one of the three consumer redress schemes charged by the government to adjudicate complaints about letting agents from landlords and tenants has issued guidelines about charges to landlords.
The service explains that agents in England and Wales are allowed to charge fees, but must show that they are fair and reasonable.
The guidance follows criticism from Citizens Advice about ‘inexplicable’ charges to landlords and tenants.
“It’s not our job to set or ban fees, but if letting agents make a charge then we expect them to justify what they have done for the money,” said a PRS spokesman.
“If we think the charge is unfair, then the award is likely to go to the landlord.”
The guidelines say:
- Marketing letting services to a landlord must be clear and accurate and not misleading
- Advertised charges should include VAT
- Landlords should have time to consider any contract before before agreeing any charge
- Letting agents should provide clear information about the service offered in return for the fee
- Letting agents should not make ‘secret profits’ from repairs by telling landlords about any commission or other payments tradesmen may make to them
- No charge should be made for work that is not carried out, nor should an agent claim work is necessary when it is not
- Termination or cancellation fees should be clearly explained at the start of the contract and no fee should be charged if the agent has breached the agreement by failing to act with reasonable skill and care for the landlord
Sean Hooker, head of redress for the PRS, said: “As a scheme, we felt that the subject of agent fees needed to be looked at in an objective and reasoned way and that agents should be provided with guidance on what they can and can’t charge. Tenants and landlords also need help understanding what they can complain about and which practices are legitimate and legal.
“Given the importance of this area and the fact that the redress schemes are now a major part of the mainstream lettings industry, it would have been remiss of the scheme to duck the issue and not make our agent members fully aware of their obligations”
New Landlord Fees Code for Letting Agents – http://t.co/ICFXsbp69U
— LandlordZONE (@LandlordZONE) February 26, 2015