Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

This month’s article – Letting Agents Fees – By Tessa Shepperson

As I hope all letting agents will be aware, there are new provisions from the Consumer Rights Act 2015 (section 83 onwards) which come into force on 27 May (ie next week!).

Note that these new rules apply to England only.

The provisions relate to letting agents fees and are intended to create full transparency – so landlords and tenants know exactly how much they will be required to pay before they enter into any form of contract or agreement.

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Agents need to display all fees, charges or penalties (however expressed) which are payable to the agent by landlords or tenants for any letting agency or property management work.

The only exceptions are:

  • rent payable to a landlord
  • tenancy deposits
  • fees, charges or penalties which the agent recieved from a landlrod under a tenancy on behalf of another person

The regulations do not apply to landlords but they apply to property managers (if you make a charge). It’s not what you call yourself (ie agent or property manager) but what you actually do.

So if you find tenants for a landlord or deal with the management of their property for a fee, you are covered by the regulations. But not if you just publish the advert or provide a way for landlord and tenant to contact each other in response to an advert etc.

Here are some more points to note:

All figures must by quoted INCLUSIVE of VAT

  • The fees need to be displayed at all premises where you deal face to face with the public, and the list must be somewhere it is likely to be seen by customers – i.e. they must not have to ask to see it
  • It must also be displayed on your website
  • There must not be any surcharges or hidden fees, and vague phrases such as ‘administration costs’ must not be used
  • It must be clear whether each charge is made per property or per tenant
  • If the fee cannot reasonably be determined in advance you must describe how it will be calculated
  • There is no legislation on what an agent actually charges as this is a commercial decision for each agent to take
  • You can split charges between landlords and tenants if the tenant will benefit from them – for example drafting a tenancy agreement or the charges for getting an inventory done. Needless to say there should not be any duplication of charges
  • You must also publicise whether you are members of a client money protection scheme and
  • Say which Redress Scheme you belong to

These new rules are in addition to the guidance published by the Advertising Standards Authority and any other relevant consumer regulations

The new rules will be enforced by Trading Standards, and they can impose a fine of up to £5,000, although they have to give you written notice first and there is a procedure they have to follow.

Help from ARLA

ARLA have an information page here and have also created templates for ARLA members to use to display your charges.

Even if you are not an ARLA member I suggest you follow the form of their templates as they have been designed to ensure that you are compliant. You can see the templates here

Good luck!

Tessa Shepperson

This article was originally published in the LandlordLaw Newsletter

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

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