Property Redress Scheme guides on 'unfair agency fees'

The Property Redress Scheme, one of three official redress schemes for letting agencies, has set out two guidance notes for agents regarding fees.

In a report issued by the PRS last month it was revealed that of the complaints about agent members raised with the scheme, the most common grievance involved unfair or excessive fees being charged to consumers - whether landlords or tenants.

The first guide is for agents and their landlords, covering the advertising of fees and description of agents' services, as well as being transparent about optional and non-optional fees.

Under a section entitled Unfair Lettings Fees, PRS claims that it may be best practice to explain to potential Landlord clients how your fees are calculated, factors affecting calculation and how/when fees will be payable. It will aid clarity if the agent provides worked examples of calculations of this kind.

The scheme also says agents should inform the landlord client of any fees they propose to charge tenants, for example for carrying out pre-tenancy checks. This is important information since the level of any charges requested may have an impact on the number of tenants who may be willing to rent the landlord's property, and so affect a landlord's decision whether to use services of that agent.

Where a charge is likely to be unexpected, or to come as a surprise to a potential landlord client, PRS recommends that the agent should highlight these details individually.

Those fees that may need to be given particular prominence include charges for providing a tenancy agreement, charges for the agent familiarising himself with a tenancy agreement provided by the landlord, as well as check-in, check-out and deposit handling fees.

The guide also states: Agents should also not make any secret profits' from their landlord; meaning money the Agent is paid in addition to their agreed commission from the Landlord client, and which the Landlord client does not know about.

The second PRS guide relates to agents and their fee transparency towards tenants.

Property Redress Scheme, which has been operating since July last year, has over 2,900 agent members.