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Written by rosalind renshaw

The lettings industry looks set to have to comply with the ruling that agents must show their charges to tenants in all adverts, including listings on portals within weeks – even though official guidance is still being written.

The Committee of Advertising Practice’s timescale for “full compliance” is early 2014, but it expects to issue interim guidance by the end of this month.

The Office of Fair Trading is also drafting guidance, likely to go further than simply covering adverts, and this would form definitive new rules early next year. If the OFT does not issue its advice until early 2014, it would mean that it will have taken virtually a year from deciding that letting agents must disclose their fees to working out how this can be done.

A letter, seen by Letting Agent Today, has been sent by CAP to the main industry representatives – both sets of ombudsman services, the RICS, ARLA, UKALA, NALS, and the two main landlord bodies.

Earlier this year, the Advertising Standards Authority ruled against a Your Move advert for a rental property that showed the rent, but not charges to tenants.

The CAP letter updates the industry bodies on how the property portals will cope with the requirement, following a meeting with Rightmove. Zoopla is apparently happy to follow Rightmove’s lead, the letter notes.

The letter explains: “Currently, their system does not allow agents to insert detailed cost information about fees and, for complicated technical reasons, there seems to be little prospect of swift software changes.  

“However, Rightmove proposed an interim solution whereby a hyperlinked ‘fees’ statement next to the rental price could be added to the full page ads. This would link to a pop-up page containing generic information about the range of fees that could be charged.

“Rightmove said they could relatively easily implement that change while they independently worked on a full system upgrade, for launch early next year, that would allow agents full flexibility to insert bespoke information about their fees.  

“That could work in a similar way to the interim solution but of course the information consumers would see in the pop-up would be more accurate and more complete. Agencies would be provided with forms that would allow them (or their partners) to upload accurate information about fees.

“The interim solution suggested by Rightmove would not apply to those results listings consumers first see on performing a search. Rather, the pop-up information about fees would feature on the ‘property details’ page consumers click through to. Rightmove could introduce much the same system for its mobile platforms, which form an increasingly large part of its business.”

The letter continues: “In a sense, therefore, the guidance as proposed for portal listings is softer than that currently proposed for listings on agents’ own sites. However, it must be stressed that this solution is temporary; as you’re probably aware, the OFT is also in the process of drafting guidance to the lettings industry, so adding an ‘interim phase’ would allow us to synchronise our timescale for full compliance with the OFT’s formal publication of its guidance (due early 2014).  

“The OFTs guidance is likely to be more wide-ranging than ours in that it has the remit to cover the breadth of trading practice, not just advertising. It is likely, however, that the OFT’s guidance will have explicit conditions about fees and advertising and will, therefore, replace our guidance.

“To ensure we pursue a joined-up approach, we had a constructive knowledge-sharing meeting with the OFT in June and will continue to liaise with it closely in advance of publication of our respective guidance.”

The letter, from CAP compliance executive Rupa Shah, concludes by asking the recipients to express any views by August 9.

But is it time for this ‘shambles’ to end? See also next story.

Comments

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    Why hasn't someone tackled this before? Why do I have to rely on a free site rather than the organisation to whom I pay a great deal of money - perhaps some of which comes from tenants fees..... just a thought.

    Well done Ros - this is a huge issue and needs some joined up thinking and advice.

    • 03 August 2013 11:09 AM
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    A great bit of industry journalism - thanks EAT.

    • 01 August 2013 12:32 PM
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    I hope this stops the dodgy agents - we are having a few issues locally with cheap agents who are charging £99 tenant find fees to landlords and then ripping the tenants off with astronomical hidden charges to make up the shortfall.

    always the same case - minority ruin it for the majority....

    voice - i live in the UK and agree with kevin, banks and other financial industries do take the p**s with 'hidden charges', you must live in a perfect world - well done.

    • 01 August 2013 11:07 AM
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    Kevin,

    You obviously don't live in the UK.

    Mortgage brokers show their fees before any discussion starts.

    Banks and financial services show fees and APRs before people can apply.

    If they didn't, they would be in contravention of the law and their licenses.

    • 01 August 2013 10:39 AM
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    @andystrev

    Although I agree with your comments it does seem to be the usual estate agent scapegoat mentality with this sort of thing.

    Does a mortgage broker give his fees out when you sit down to meet him? or does he only inform you as you sign the contract? you still have the option to sign or not to sign, so I don't see the problem. Do banks, car garages, anyone given finance have APRs plastered in their windows? no, not usually.

    The fee by a tenant only becomes payable when they want to proceed, so it is only relevant then. Prior to that they have seen the advert, booked a viewing, done the viewing, and made a provisional decision to make an offer and hope to proceed. If an agent then says 'our fee is a million pounds' I am sure they would change their mind.

    The issue is not agents charging fees, it is dodgy agents full stop. Dodgy agents are a problem to tenants, landlords, the industry in general, everyone. Stop the harassment of normal working people, catch all the bad un's and we have no problems.

    • 01 August 2013 10:08 AM
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    I don't understand why this is such a big issue. Tenants have the right to know what they are being charged so we began putting this in the bullet points as soon as ASA picked up on it. Now we have added an extra page to our application forms / property lists too setting out ALL of our charges to tenants before, during and after tenancy so it's crystal clear. I'd expect clarity from any company I dealt with hence I have no issues being clear with my clients. What I don't understand is why 'some' believe that fees are all hidden and that there is some great conspiracy to rip off tenants. Why would this be endemic? I don't understand what we have to gain as an industry

    • 01 August 2013 09:28 AM
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