Letting agents are being caught by Trading Standards officers in a series of ‘stings’ over the disclosure of letting fees, following the Advertising Standards Authority ruling.
Potential ‘tenants’ are allegedly catching agents out and accusing them of breaking the law, as Trading Standards attempt to police the issue.
Agents are telling Letting Agent Today that the lack of any direction from the industry bodies so far has been a significant problem. ARLA, for example, has apparently yet to issue guidance.
We are told that Trading Standards are taking the view that fees should be disclosed before viewings, and that agents who do not do so are breaking the law.
But agents – and Letting Agent Today – query this.
For a start, there is as yet no law. The Property Ombudsman does not say agents should disclose their fees so early – in which case, is TPO encouraging agents to break the ‘law’? In any event, as agents know but probably people outside the industry don’t, the Trading Standards interpretation is unworkable because some fees may not apply to all applicants.
The Office of Fair Trading has said that all compulsory fees should be disclosed – but this is impossible because agents themselves do not always know what fees they will be charging until the tenant has been referenced and their circumstances made known – for example, if a guarantor is required.
The OFT earlier this year called for letting agent fees to be set out in clear tariffs. Indeed, it had no hesitation in saying so.
Yet its definitive advice is nowhere to be seen and is still not expected for some months. Interim guidelines about advertising are due to be issued at the end of this month by CAP.
But agents that we speak to are increasingly querying the requirement at all, describing it as well over the top and a complete shambles, and openly asking why the industry bodies are not taking a stand against the authorities. One agent said it was high time for the membership bodies to show “balls”.
Cars are, after all, advertised at their sales price, when everyone knows that they would have to pay compulsory tax and insurance in order to be able to get it on the road. Yet these charges do not have to be shown on car adverts. Nor are all those extras charged by airline companies always shown when you buy a ticket.
Nor are diners told when they book meals at restaurants that there will be a service charge, nor congregations told that when they go church there will be a collection plate.
All right, these are not mandatory fees in the same way – but all the same, they exist, people expect to pay and you don’t hear cries of protest that they have been unexpectedly ripped off during lunch at the Ivy or in the middle of a rousing hymn.
Meanwhile, the Property Ombudsman has a code of practice to which all its member letting agents must adhere – and which does not insist on agents disclosing their fees to tenants upfront.
The code says: ‘Prior to an applicant’s offer being formally accepted, you must set out in written form and must actively flag any significant pre-tenancy conditions and terms for the letting including the circumstances in which the applicant may have any potential financial liablity for fees, charges or penalties…”
Some letting agents’ own sites already give easily-accessible details of fees, and in any case, surely the whole matter could be resolved by a simple requirement for a clear signpost on all agents’ websites and other marketing saying: “Fees are payable – please contact your local branch for details.”
LAT asks the question: Is it really too late for a dose of common sense?
Surely, there is a simple solution staring us in the face – one that won’t tie everyone up in red tape, technology and knots.
So why don’t the industry bodies make a stand?