Your Move has said it is ‘disappointed’ by yesterday’s Advertising Standards Authority ruling.
While the ruling specifically banned a Your Move advert on Rightmove, the effect is that it now makes it a requirement for all letting agents to display their fees in all adverts and listings – something that is actually currently banned by Rightmove.
In a statement, the firm said: “Your Move is committed to regulatory compliance, as demonstrated by active participation in The Property Ombudsman scheme and the Association of Residential Letting Agents, and is therefore disappointed by the ASA Council ruling.
“Your Move follows good industry practice and is compliant with the ARLA and TPO Codes of Conduct and the Consumer Protection Regulations.
“All material information including tenant fees is provided prior to tenants making their decision to enter into a Tenancy Agreement. This complies with the OFT’s Guidance for Estate Agents.
“Your Move also complies with the contractual requirements of Rightmove where publication of fees within advertisements is expressly prohibited.
“Your Move is updating references to fees in lettings advertising and will continue to take any steps necessary to comply with CPR as we currently interpret it.
“In view of the ASA decision we continue to ask the OFT to produce official guidance for lettings urgently to ensure greater clarity and uniformity across the industry.”
The ASA ruling is that advertisers will now have to make clear their compulsory fees and charges. It says that if the fees cannot be calculated in advance because of, for example, an individual’s circumstances, then the advertiser must make clear that additional fees and charges have been excluded and provide enough information for the consumer to establish how the fees are calculated.
Both industry bodies and individual agents are trying to understand the full implications, and a number gave us their views. Both Rightmove and ARLA have been invited to comment but have not yet done so.
Isobel Thomson, chief executive of NALS, said: “We are currently considering our approach in light of the ASA ruling and will ensure that if further guidance is needed for our firms as a consequence, we will supply it.”
Peter Bolton King, residential director of the RICS, said: “We are carefully considering the legal and practical implications of this latest ruling, and will be issuing detailed advice to our members in due course.”
There was an even shorter statement from the Property Ombudsman, who said: “The ASA ruling raises some potentially significant implications and TPO will comment after giving it due consideration.”
Caroline Kenny, of UKALA, said: “It could be entirely appropriate to include details of standard admin fees in adverts. But it is unlikely to be possible to include variable charges until the agent knows more about the prospective tenants’ circumstances.”
Agents themselves were quick to point out the practical difficulty of compliance – not least, that charges can vary if, for example, the property is let where a guarantor will be required, or if a tenant has a dog or cat.
It is also not clear just how quickly agents will have to change their advertising, but given that Your Move has already had an advert banned, the implication is that is should be immediately, or at least as soon as possible.
Labour meanwhile welcomed the news and revealed it is doing its own investigation into fees.
It also renewed its call for the regulation of all letting agents.
Shadow housing minister Jack Dromey said: “The ruling by the Advertising Standards Authority will be welcome news to struggling renters who are hit by fees that are unfair and unclear. Any step to improve the transparency of fees and make them more straightforward is a step in the right direction.
“But with the lettings market being described as the property market’s ‘wild west’, it is clear more fundamental change and greater protections for renters and landlords are required.
“For letting and management agents there are no requirements for client money protection, no requirements as to conduct or mandatory safeguards for the consumer and no obligations, unlike estate agents, to register with a redress schemes whereby awards can be made against agents for financial loss to consumers.
“That is why Labour has called on the Government to bring an end to confusing and inconsistent fees, making them understandable, upfront and comparable across agents, but also to take action to regulate the industry.
“We have also committed, as part of our policy review, to assess the level and extent of fees, with investigations uncovering unexplained charges of over £500.”
Yesterday afternoon, in the Lords, Labour’s Baroness Hayter again moved her amendment to the Enterprise and Regulatory Reform Bill that letting agents should be required to sign up to an ombudsman scheme, with the OFT empowered to ban letting agents as they can do estate agents.
Comments
According to Which this is just one strand of the work that they are doing into letting agents.
Is any other industry or profession being told they must include their fees in all advertising? Solicitors?, Banks?, Accountants?. Doctors?. Etc. If not, why not?
In my view this is just another easy kicking excercise by those trying to justify their being.
Arnie from newington - 'Many a time I have been tempted by such offers only to back off when the detail and comitment is revealed further down the line'
Thats the whole point of this fella because unfortunately many have had the same experience... when dealing with agents.
'Which' can be hypocrites and other industries can practice the same methods but it doesn't excuse the fact that we're ALL wrong. Lets worry about our industry and let the others worry about theirs...
There is a good post exposing the hypocrisay of Which on their discussion:
Interesting that on the Which website I have the chance of a “Trial” subscription at £1.00 but at that point it does not tell me what my future subscription commitments will be and that they will continue until I cancel.
Which? seem to be missing (and hopefully not avoiding) my point. If they feel that letting agents should divulge ALL fees etc at the very first point that the consumer sees the information, WHY do they do not do so themselves? Further details of costs etc are not revealed until the second stage in the process which is what most reputable letting agents do already.
Many a time I have been tempted by such offers only to back off when the detail and comitment is revealed further down the line.
Whilst some of us may have transparent reasonable fees, we’re the exception not the norm. I’ve made my peace so lets cut this off at the knees and stop all the BS because as an Industry, for too long we’ve tolerated agents who canvass and door knock their colleagues stock and who ‘ambush’ exorbitant tenant fees. If I’m wrong feel free to blow my mind but ‘customer service’ only exists on our terms.
Transparency is seen as weakness and our art of war means everything is camouflage. There’s a reason why EPC’s get redacted and fees get hidden and that reason is…us. We’ve created an environment of mistrust and treachery amongst ourselves that’s incendiary. I don’t know, maybe we weren’t breast-fed but our passive aggressive nature is disturbing and continues to shape our behaviour today.
Forget the rhetoric and look at the message, as a reflection of our entire Industry there is something very wrong with our fees and it needs clarification; and if we’re the ‘gunslingers’ we’re not going to clean up Dodge ourselves...
I’m p*ssed when other agents impair the reputation of our Industry because it has a direct effect on my reputation, why aren’t you?
"As it is" is right and the person accusing him/her of resorting to cliche's is naive. The real elephant in the room for lettings is the number of agents who run their client account like a Ponzi scheme.
I personally know of two local businesses who sold up to competitors where part of the deal was that the buyer made good the hole in the seller's client account. (In one case my understanding is that the seller simply handed the business over to the buyer in return for the buyer taking on his client account liabilities) .
I can't be bothered to trawl through the archives but there's been a hell of a lot more than four reports in LAT over the last five years - and those are just the ones that have been found and made public. I bet there's loads more (such as the two deals I described above) that have been quietly sorted out, and a boat-load more still to be discovered.
I agree with most comments here. I have two points to make:
1) It is bloody unfair that Your Move were singled out and got the bad press. For us in the industry we understand but to the average consumer "speed reading" anything about this it looks as though Your Move were the only agents NOT displaying fees.
2) I WANT to comply with the ASA ruling but I am b****red if I can work out what to do. Rightmove forbid displaying fees. ASA say fees should be displayed. For now I am changing my property descriptions to state fees are payable and will be explained to you before you book a viewing.
Anyone got any better ideas?
When will people stop ******* meddling with this industry. On the one hand we are being told we are crucial in terms of providing much needed housing, on the other, we are being constantly bombarded with CRAP!!!
"There are many" name one..... you are just like those labour MP women who can not find a subject to raise in Parliament so spout off about cliché hear say.
LAT is always onto the case of known rooked agents but in the last 5 years there have been no more than 4 stories where agents have faced court for fraud or misappropriation of clients money.
If you have any evidence that any Agent is using clients money as an unofficial overdraft, do something positive about it. Otherwise you are just as bad as all those who are seeking to glorify themselves off the back of unsubstantiated fiction.
I wish the ASA et al would get a life and instead focus on all the agents who are using clients money as a vicarious overdraft. There are many.
This is a Which? hunt supported by shelter. Its a headline to avoid the real issues.
The agents targeted are the ones who are actually compliant and who offer consumer protection voluntarily.
This is a load of crap.
@denise - you really havent a clue what you are talking about have you? I can't believe your silly comment - a requirement of ARLA is to be a member of an INDEPENDENT redress scheme - Doh!!!
" I just checked. It was RICS to whom the Wild West quote was attributed"
It seems a bit rich for RICS (who have a vested interest) to tar agents in the hope of getting the nod to regulate agents.
Perhaps they should sort out the "cowboy" surveyors who overvalue two bedroom new build flats.
@M come on now the decision is emotional not logical as in all purchases. The punter ony gets the oik when something goes wrong and nothing is done to put it right. Thats when they find the costs they paid do not give them the service the expected. Get your act together or get rid of the tenant or better still vet the prospect first and if they apear troublesome...........................
@Yarrum95 Noce one!
@ Laurence Meade I have all landlord's sign that they want me to act as either a find only or full management. It is finalised with a signed AST from both sides.
I almost forgot.
Having added up everything described in my comment below and finally arrived at a fee to charge for referencing I then add another 20% on and hand that over to the Government. It's called VAT.
So you charged a mark-up of £150 but because you called it an administration fee that was different?
How do you define what something costs?
It costs me, say £10 to buy a reference from a reference company. I also have to pay staff to obtain the information from the tenant, forward it to the reference company, follow it up, make a decision based on the result and contact the tenant.
I also have fixed costs in my business - rent on my offices, business rates etc etc. Every transaction I do has to carry a "mark-up" as a contribution towards those fixed costs.
Finally I add something every time I do some work for somebody. Its called a profit, and its how I - the owner of the business, who also works in it full time - pay my own mortgage and feed my family.
What part of that does anyone find so difficult to understand?
Prosepctive tenants pay a lot less in up-front charges rathen than if they were buying a property.
They expect to pay £1,000 when they buy but sometimes think agents get referencing for free.
The main problem with the industry is the "mark-up" agents employ rather than the passing on of actual costs.
When I was an agent I only passed on the actual referencing costs, but made clear there was an admin charge of £150 per property, which everyone appeared to accept.
What on earth is so secretive about fees- whether that be those charged to Tenants, Landlords or Sellers. For far too long, agents have been deliberately vague about fees leading to confusion.
The reality is, as numerous surveys have revealed, only a small percentage of Landlords (and indeed Tenants) choose the agent/property based on fees- they chose based on a combination of factors such as market share, likeability, regulation, professionalism, etc.
As an agent, you should feel confident in the fees that you charge- that they represent genuine value for money. You don't go in to clothes shops to find no price tags on the clothes in the hope that you'll like them so much you'll pay whatever you're asked to. You don't book a plumber who wont be upfront about their pricing- why should estate & letting agency be any different?
Stop making excuses and publish your fees- and if you're embarassed by them then change them or find another job.
Re Laurence Meade: If you have an instruction to let and manage a property your contractual obligations start when you accept his instructions, not when the tenant moves in
I share your philosophy about involving the landlord as little as possible. He has employed a professional to do the job and he should let that professional get on with it. If I employed a mechanic to replace my car's gearbox I wouldn't expect the mechanic to consult me every step of the way.
However, and its a big "however". By doing this you put the onus very firmly upon yourself to ensure you are acting in accordance with both the landlord's instructions and industry best practices. Get it wrong, or simply fail to do it to the landlord's satisfaction and you need to be able to defend everything you've done.
That's why corporates often take the lower risk option of consulting the landlord and getting his (preferably written) agreement at each step of the way.
If we carry on the way we are going we are going to end up with solicitors conveyancing lettings contracts. That is a barmy idea, or is it? We would have a legal and nonsense avoidance expert handling what is a retail sale very similar in complexity to buying a new car on finance. Possibly the only difference is that idiots can not afford to buy a car but they must by lease to live somewhere regardless.
Please can people who know very little about letting leave the landlords out of the letting process? If I want to let a flat I go along to my favourite agent and ask them to let it. They say yes and the job is done. Its that simple. There is no contract until a tenant signs on the dotted line with the agent. The contract between the landlord and the agent only comes about when the agent starts management and the landlord accepts rental payments and it lapses as soon as a tenant leaves. All the fees that a tenant has paid to this point stay with the agent. Of course there is more in that the letting agent goes to see the property etc. but the landlord does not need to involve themselves other than to hand over a set of keys.
( Of course some people may work with letting agents in other ways but I do not know about that).
Trying to be objective M has a fair point.
The prospective tenant doesn't necessarily understand the landlord / agent relationship and might not understand immediately that he has to pay fees - he might think we're a shop like Tesco.
However, a simple statement "agency fees will apply" ought to cover this. There should be no need to proactively publish prices.
We all know that tenants are rarely price sensitive where agents' fees are concerned - the fee the agent charges isn't integral to their "buying" decision.
Put another way, (other than at the very bottom end of the market and the rare occasions when the applicant considers everything else to be entirely equal) no-one will make a decision on where to make their home based on the fee the agent charges..
How are these online "free to Landlord" services going to cope when tenants see they are paying for their marketing etc
why subscribe to TPO if you are getting a redress scheme from ARLA.
Are you one who thinks the TPO is something other than a self appointed company with a fortunate name.
Let me check Yep the URL The official Ombudmans and regulator of the lettings industry is available.
Please send a cheque Fleece a muggins, PO Box 19 Nigeria
Isn't the main point of all this that prospective tenants should have a pretty good idea of what they will be expected to pay in fees to the agent BEFORE they spend time and money trawling around available properties and, eventually, falling in love with one of them?
I just checked. It was RICS to whom the Wild West quote was attributed.
Thanks guys.
Those of us who are totally upfront and transparent about our very reasonable fees and are Members of ARLA and TPO have absolutely nothing to worry about. We want the industry regulated because licencing letting agents would get rid of the cowboys. It is only the agents who rip off tenants with huge hidden who have a vested interest in keeping these under the carpet.
Licensing, regulation? - bring it on!!! I have nothing at all to fear and everything to gain when prospective tenants can compare my fees with the outrageous fees being charged by other agents.
I think it was the bloke from RICS who publicly described our industry as the Wild West.
(Apologies to him if it wasn't)
“But with the lettings market being described as the property market’s ‘wild west’
This comment really annoyed me and I notice that it is not attributed to any person or body (it's probably from Shelter).
Following 50 years of government meddleing the Social Rental Sector currently resembles Mordor from Lord of the Rings.
In contrast with the free market, light regulation and lettings professionals the private rental sector is more like The Shire.
The government now have their sites set on the private rental sector which is the equivalent of the orcs having their sites set on The Shire.
A repeat of my post on EAT
Another step on the road to FULL (we already have partial) dictatorship in this once free country. More legislation under the guise of consumer/public protection. Our current useless coalition government agreed to have a 'fixed' five year term - how long before this is extended to say ten years to allow time for even more restrictive legislation to control us from cradle to grave. What to do? No idea!
Agents - please at least put your own houses in order - to restrict the "amunition" that you are giving to these quangos and their unelected staff. It is easy eneough.
I agree with everything "In addition" says except his final sentence "its nothing to worry about".
Unfortunately it is. People with only the most basic and cursory knowledge of our industry have the power to wreak havoc upon it.
Granted the ASA has limited powers in its own right, but it is pushing against an open door when it suggests to a overnment desperate for popularity that the excesses of these nasty horrid letting agents must be curbed.
Your home is at risk if you do not keep up payment on a mortgage or loan charged against it.
The value of share may go up as well as down.
Other listings magazines exist.
Your elected MP may fiddle their expenses
Your endowment or pension fund might be used to pay bankers bonuses
Your mortgage firm reserves the rate to ignore your tracker mortgage and charge what the hell it likes.
The ASA can not single out one industry for full disclosure when other do not.
This is nothing to worry about, a footnote "Fees payable" will suffice
"House to Let £1,000 pcm. Tenants fees will apply. £100 per tenant (children excluded)(from paying fees, not the house itself, although we'd like to exclude some of the little "darlings"); administration fee also applies at £199; guarantor fee of £75 (which will be increased to £500 when we find out that the tenants actually deliberately exaggerated their income and had no chance of passing referencing in the first place); £25 fee if you have a cat; £50 for a dog (we're "cat people"); £250 for pet snakes; £1,000 for pet tarantulas (well, come on, who's going to carry out the property inspection?); £100 charge per abortive visit for any contractors called to the property - if you're going to tell us your boiler isn't working, then at least have the common courtesy to actually be there when we tell you when the engineer is coming to visit; £100 admin charge for having to ask the boiler man to come back when the oil tank has been topped up (tenants please check your oil, you wouldn't let you car run out of fuel would you?); £150 for checking out; £200 PER HOUR for any time spent having to argue the toss about a genuine and rather generous £50 deduction from the deposit to contribute towards the costs of re-tiling the whole bathroom required after 3 years of abuse; VAT will apply to all of the above. Oh no! we forgot that we have to give you the gross figures as the public simply can't add the VAT themselves - not even since the government tried to make it easier by rounding it up to 20%. So, £120 for referencing........