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Written by rosalind renshaw

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? 



Comments

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    What about when an agency takes a "non-refundable" deposit from you to take the property off the market, tells you that it will act as the agency fee, get you to sign application forms, and THEN tells you there's another £280 (on top of the £200 deposit, £795 refundable deposit and £695 for first month's rent) to pay? Not exactly fair.

    • 28 October 2013 21:04 PM
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    OK LAT and EA's what is the simple solution staring us in the face?

    Perhaps tenants should start a whistleblowing campaign of reporting unpublished rip off fees to trading standards, in order to speed up the pace of LA regulation.

    • 03 August 2013 20:57 PM
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    England does have one set of laws.

    Both Trading Standards and the OFT are responsible for enforcing it but OFT as a national organisation can provide guidance to all busineses in England.

    Trading Standards are more likely to enforce the law on a day to day basis.

    The point is the consuemr shouldn't have to expend time on a viewing only to find they have to pay a lot of unexpected fees.

    Its up to letting agent to ocmply with the law (which has existed for 5 years) - not to rely on the OFT to tell them.

    • 03 August 2013 19:38 PM
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    How is it that TSI have decided to police something the OFT haven't even commented upon? Our TSO is happy that we disclose fees before the tenant commits to anything or spends any money provided a menu of fees is always available at every stage and provided we advise tenants at first contact that fees will be payable and will vary depending upon their circumstances.

    Surely England has one set of Laws?

    • 03 August 2013 11:31 AM
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    Insurance is a hefty, compulsory charge - yet never mentioned. So is servicing.

    • 03 August 2013 11:21 AM
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    All we agents need is a hard and fast rule so we are all on a level playing field. As its, again, rogue agents have a competitive edge over the honest ones.

    If we disclose fees before a viewing, and another agent doesn't it implies we are more expensive. When that tenant finds a property they really want, it may be too late as they may not have come to us and wont want to lose a suitable homes, so will just accept it.

    • 03 August 2013 11:12 AM
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    Stop whinging - its very easy for you to set out potential fees to consuemr sina dvance even if you cannot be exact. The poitn is you shouldn't take a consuemr on a visit only to then tell them there is a hidden fee whe nyou knew there might be one all along - even if you coudl not specify exactly what. The consuemr shouldn't have their time wasted and is entitled to the information.

    And complusory taxes SHOULD be included in car adverts - the law is quite clear.

    The relevant elgislation is the Consuemr Protection from Unfair Trading Regulations 2008 - which have been around for 5 years as the name suggests - they do not say in black and white that fees have to be given in every scenario as they are general regulations that apply to all industries - you just have to apply the law to each particular scenario.

    • 01 August 2013 22:59 PM
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    Just saw this - its unbelievable that Trading Standards are disregarding OFT, TPOS and acting on a frolic of their own.... WTF? Are the sponsored by shelter?

    We comply with the LAW and with codes of practise - but according to this - we would be prosecuted!! Its insane.

    • 01 August 2013 21:16 PM
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    A worthwhile article - emailed to all staff. We have been challenged by a TSO in Sussex - its really is confusing as we have no idea what he is moaning about as we are very strict in complying with our code of practice - unlike our competitors who LIE about hidden charges - they havent had a visit? They disclose fees up front - but not all their fees - we do. When we disclose them appears the issue - we disclose them whenever asked and tailor them when they offer and before they enter into any binding contract or give us one penny. How is that WRONG?

    • 01 August 2013 21:03 PM
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    Trading Standard are short staffed and under resourced. So why the hell are they policing a Law which doesnt exist when their is an OFT amnesty instead of dealing with knock off fake booze, traders ripping off old people and moody gear.

    We are an easy target. They are fools.

    • 01 August 2013 20:56 PM
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    Great Stuff Ros - what the hell am I paying my ARLA membership for - they have said sod all. This is really helpful and confirms what we believe. Thanks

    • 01 August 2013 20:53 PM
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    Its not that agents have nothing to hide - its just ambiguity of what is required. TPOS & ASA are at odds with when disclosure is required - ARLA, RICS etc say nothing.

    I thought that OFT had offered an amnesty whilst this was resolved, yet in my area (North London) we have been 'stung'!!! Never any intention to mislead - just not asked!!

    They cited some 2008 Consumer Act - so why hasn't it been mentioned before?

    • 01 August 2013 12:40 PM
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    Surely Agents have nothing to hide, if they have "Terms of Business" to make available to prospective tenants when they enquire in their office or if they put a clear link to these on their Web Site? It is prudent to give these ToBs in writing to a prospective Tenant at the time of a viewing so they are aware of costs if they submit an application in against that property.

    Shelter have a hysterical campaign against LAs, and it is right for the PRS to expect that practices are consistent across all business sectors excluding ecclesiastical services!

    • 01 August 2013 09:59 AM
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    This was a genuinely interesting piece of journalism...until I read the analogy: "nor congregations told that when they go church there will be a collection plate". Dear, literally, Lord.

    • 01 August 2013 09:34 AM
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    I couldn't agree more. Also, why is that many other industries don't have to include fees in adverts? For example, how many solicitor adverts tell you even their hourly rate? Or accounts, chiropractors and millions of others? This simply goes to show how CAP have fallen into the trap of listening to media hype about agents fees and passed a judgment that is patently ridiculous and without even understanding the market. (Is it not fair to say a To Let board is an advert? How are we going to put all our fee information on that? Who wants to join a petition to lobby for a change to Town and Country Planning to get larger boards if we have to include fee!)

    The OFT are silent as their comment about fees is that they have to be provided before a contract is signed.

    The closest market to lettings will be estate agents and section 18 of the Estate Agents Act deal with fee information, it says it has to be provided before a contract is signed.

    Don't get me wrong, agents should be 100% transparent with fee information. I think every agent should have the fees easily available from their website. This would make it easy for tenant to find and to use for "please see" type references. In fact the solution probably lies in requiring minimal wording like "ADmin fee payable".

    I agree, lets see some common sense and stop picking on the vast majority of agents who do not deserve it.

    • 01 August 2013 08:51 AM
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    I watched an advert on TV last night for Coca Cola. At no point did it inform me that a fee might apply should I choose to buy their product.

    Are they falling short of Advertising Standards?

    • 01 August 2013 08:44 AM
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