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Lets News: Agent fee rules come into effect
As from last Thursday it is now a statutory duty for letting agents to fully publicise the fees they charge to landlords and tenants. Under the Consumer Rights Act 2015, agents must prominently display a list of their fees at each of their offices as well as on their website.
Guidance for the new requirements has been issued by the Department for Communities and Local Government with input from the Advertising Standards Authority.
The guidelines state that: “All fees, charges or penalties (however expressed) which are payable to the agent by a landlord or tenant in respect of letting agency work and property management work carried out by the agent in connection with an assured tenancy. This includes fees, charges or penalties in connection with an assured tenancy of a property or a property that is, has been or is proposed to be let under an assured tenancy.”
All fees must be shown inclusive of VAT but agents do not need to publicise the rent payable to a landlord or the tenancy deposit which is taken as security against damage or violation of the tenancy agreement.
The requirements will be enforced by Trading Standards and any agent that does not comply could be fined up to £5,000.
“Lower penalties will only be applied in extenuating circumstance which will not include ‘I did not know about the law’ or ‘I did not know what to do,’” said Sean Hooker, head of redress at the Property Redress Scheme. “The fees should be clear and specific without surcharges or hidden costs. Generic terms such as ‘administration fee’ are no longer acceptable and all charges should be displayed inclusive of tax.”
Letting agents are now also required to display which of the three redress schemes they have joined (The Property Ombudsman, The Property Redress Scheme or Ombudsman Services: Property) and whether they have Client Money Protection (CMP).