The government have decided not to regulate the Letting market despite concerns over unscrupulous landlords and agents
A government paper released yesterday confirms the current government will not impose regulation on the Lettings industry. There is currently no legal requirement for letting agents to belong to a trade association, although many letting and managing agents do submit to voluntary regulation.
Estate agents who deal with property sales do have to comply with basic levels of regulation, including registration with the Office of Fair Trading and having access to an Ombudsman scheme for dissatisfied customers. It was thought that the Government would impose similar regulations on the letting market this year.
In response to this news, there was a report on unfair letting agents fees this morning, on the BBC Radio 4 Today Program. Ian Potter, from ARLA (the Association of Residential Letting Agencies). ARLA was asked to comment on the decision. They have been instrumental in lobbying successive governments for more regulation of letting agents.
“We want regulation of the letting agents market. It is the cowboys who get the bad reputation for the sector. There are many agents around the country who are doing things properly and who do not charge these extortionate fees.” Ian Potter – ARLA
The previous Government had proposed full and mandatory regulation of private sector letting and managing agents. However the current Government claims it is mindful of not imposing too much ‘red tape’ on the industry. This seems plausible while so many have to rent, because it is increasingly difficult for first-time buyers to get on the property ladder.
In August last year the Scottish Government decided to ban agents from charging any fees to tenants. However the problem is that fees are related to genuine costs incurred by the agents, which then have to be passed to the landlord. The effect has been a national increase in rents of some 6% since the law was introduced. To our mind it seems better to be transparent and upfront about costs rather than to load everything onto rents.
What can you do as a tenant?
If the market is going to be self-regulating then it relies on tenants being well-informed about industry practices.So as a tenant, or prospective tenant, you need to know what to look for when you are shopping around.
Avoiding unfair fees
- Do not agree to pay a fee for registering or to be taken on a viewing
- Ask for a full break-down of fees in writing before agreeing a tenancy
- Ask what is included in the fees and if there are any ‘extra’ fees that could be added later, typical charges include:
- Credit check
- Tenancy Agreement
- Check in fees
- Renewal fees if you stay
- Check out fees if you leave
Points to Remember
- Not all agents will charge these fees, or if they do they may include elements in a one off fee rather than broken down individually. What you are trying to ascertain is the total charges so you can compare like-with-like.
- It is illegal for an agent to charge you fees for registering with them, or viewing properties.
- The amount of money required for a deposit varies, and must be held in trust throughout the tenancy in a government approved scheme. Ask about the amount payable, when and how it needs to be paid, and how it will be returned.
- You may be asked to pay a ‘holding deposit’ while the agent or landlord takes up your references. This is usually deducted from the first month rent when you move into the property, but may be non-refundable if you do not to go ahead with the tenancy. You should check exactly what the terms are before you pay.
- It is worth bearing in mind that the agent is acting on behalf of the landlord, not the tenants. The agent has a duty of care to their tenants in the same way as the landlord does if he is not using an agent, but the agent should always be acting in the landlord’s interests, and on their instructions.
- Even if you really like the property you should not proceed with a let if you are sure the landlord or agent are not reliable.
Here at Riley Marshall we always treat our tenants with respect, taking their wishes into consideration where possible, and we communicate with them and our landlord clients in a timely and courteous manner. We furnish tenants with the details of everything they will need to provide to comply with regulation, with the landlord wishes and with our professional practices, including any fees that they will incur. This has to be the fairest way to do business. If the tenant then wants to shop around they are free to do so.
We believe in acting in an open and honest way for good business reasons as well as ethical ones. It makes good financial sense to keep everyone advised of what the charges are to avoid misunderstanding or losing a deal later in the relationship.
We are mindful (like most agents) keep our fees within a competitive range in the knowledge that landlords and tenants are looking for value for money, not necessarily just the cheapest deal, but the best deal for them. As we all know you get what you pay for and if your agent slashes his fees well below the norm within the industry then there is a reason for that and it is likely to be inexperience over true cost, or a willingness to cut corners in a way that will be detrimental to Tenants and Landlords.
If you are looking for property to rent be assured that we are members of The Property Ombudsman (TPO) for your protection . Please do visit our main Riley Marshall website to search for property and you can contact us if you have any questions.