Letting agents were last night advised that if they charge commission on repairs to damage caused by tenants, then the cost of arranging the work should not be passed on to the tenant.
ARLA Propertymark said it sought Counsel’s Opinion following the Tenant Fees Act.
ARLA said that the answer was not contained in government guidance, which is why it asked housing barrister Erol Topal.
ARLA said it has been “contacted by many members about what can be charged to tenants for ‘contractual damages’ since the ban.
This is the illustration:
When a tenant has caused damage by blocking a toilet by flushing nappies down it and the landlord instructs their agent to arrange a plumber, can the landlord pass on the agent’s 10% commission as well as the actual costs of the repair?
Counsel’s Opinion is that this would be against the spirit of the legislation.
It might only be possible if there were a clause in the agreement making it clear to the tenant.
However, the Opinion states that the clause might be subject to challenge under consumer protection law.
If this were deemed an unfair term, the agent could be liable for a penalty.
ARLA says it is not changing its own standard contracts, and advises that agents’ commissions on repairs should not be passed on to tenants.
The full Counsel’s Opinion concludes that the agent’s cost of arranging repairs is not recoverable from the tenant.
It also warns that the risks for breaching the Act are severe and warns agents that “serious consideration” needs to be given to the penalty imposed in relation to any attempt to recover relatively small amounts of money.
The full Opinion is here: