ARLA director tells trade body to drop fight against fees ban – ‘not an argument we can win’

One of ARLA Propertymark’s most prominent members – a director on the Propertymark board – has criticised the organisation for its stance on the impending ban on letting agent fees.

ARLA Propertymark is fighting the ban, but Patrick Bullick – whose own firm, STANLEY Chelsea, does not charge admin fees to tenants – said it was not an argument the industry can win.

In a blog published yesterday under the title ARLA La Land, Bullick, who is also a former chairman of the NAEA London branch, said: “I have always approved of the drive for high standards within the industry and because of this I have been deeply involved with NAEA and ARLA for many years. I am currently a Director on the Propertymark board.

“These days ARLA Propertymark is a large and effective organisation, standing for good governance in the industry, led by the excellent David Cox.

“In recent times, government departments have started to take our views seriously – the latest example being that, after years of lobbying, Client Money Protection insurance is to be made mandatory for letting and managing agents. Quite right too!

“However, the Government has shocked the industry by announcing legislation to ban letting agents from charging admin fees to tenants.

“ARLA Propertymark has come out fighting hard on behalf of its membership, which is set to lose a valuable income stream.

“At the ARLA Propertymark conference, Baroness Hayter (a great ally of ARLA and all it stands for) warned that high admin charges to tenants creates a clear conflict of interest. Plus, they make letting agents unpopular with tenants, particularly amongst the millennial generation, who move the most frequently.

“At the risk of making myself unpopular, I agree with the Baroness.

“I doubt this is an argument which the industry can win.

“Having Client Money Protection insurance clearly does protect the consumer, but I am not sure that fighting to preserve admin fees to tenants does.

“Personally, I would like the industry to accept no fees to tenants and for ARLA Propertymark to focus its attention on helping to drive rogue letting agents out of business.

“In the meantime, STANLEY Chelsea continues to be one of the few letting agencies that charges no admin fees to tenants, because they make us feel uncomfortable – the admin fees, not the tenants!”

There is more at the link below – and giving reasons why the agent does not charge admin fees, it mentions the word ‘cartel’.

http://stanleychelsea.property-ezine.com/local.aspx?agent=stansw&ss_rid=132227&ss_lid=8

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18 Comments

  1. inthefield

    “Tenant fees make me feel uncomfortable”

    Absolutely horrifying that someone supposed to be representing the industry has this “I’m aright jack” attitude.

    I would imagine that being in Chelsea your average rental management charge is a little higher than mine in which we get £54 per managed unit.

    There is another world outside of London. Thanks for throwing g the people you’re representing under the bus just because it won’t affect you.

     

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    1. pierce

      Whilst I am not an advocate of tenants fees, they are a necessary evil for agents outside of London. Take this property for example:
       
      http://www.stanleychelsea.co.uk/en/individual-letting/herbert-crescent-sw1x-10424
       
      £12,500 x 52 / 12 = £10,833 (per month) * 5% management fee = £541.66 per month income (net of VAT)
       
      £12,500 x 52 / 12 = £10,833 (per month) * 8% let and rent collect fee = £866.66 per month income (net of VAT)
       
      Both these are about a years income for some of my MANAGED properties but if I was able to command this sort of fee I wouldn’t be charging either.
       
      “Your friend died like a stuck irish pig” <<< Name the film?! 😀

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      1. LeeHardy45

        The Untouchables
        I presume this choice isn’t some sort of meta commentary about certain agents view of themselves that got us all in this postion;)

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        1. pierce

          Nope, I was just adding that in for fun 🙂

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      2. inthefield

        Pierce. I think its actually worse (better for them) than that. On the example you highlight its £12,500 per week x 52/12 =£54166 per month @ 5% is £2708.33 per month management charge at 8% its £4333!
         

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        1. pierce

          You know, I actually got that figure but thought I had punched it in wrong so did it again, but you’re right! Can’t remember what i did to get to the figures above now!
           
          See now why I don’t do the company accounts? 😀

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          1. inthefield

            Its quite understandable. You couldnt possibly imagine the figure being that high so you subconciously lowered it!
            🙂

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  2. NickTurner

    On a tangent I wonder how long it will be that the Governemnet, once they have outlawed tenants fees will turn their attention to the auction houses who charge a buyers commission? Food for thought because what basis is their for charging them. Yes I know the arguments……..

    Back to tenants fees and I hope ARLA and others are are planning for the drop in fee income for letting agents once the ban comes in. Also a sensible working arrangement for tenants to be  referenced – an opportunity for a non profit or rather not for profit organisation to step in as a Referencing Agency.

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    1. bugs21

      I heard ARLA is becoming the mouthpiece for tenants – now I know it is true!!
      We only charge fees to tenants that can be justified by the bills we are sent ie Inventory check-in, TDS scheme and reference charges.

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      1. pierce

        Didn’t Vicky Spratt speak at their conference?
         
        http://www.arlaconference.co.uk/conference/the-speakers#vicky-spratt

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        1. simonh

          I don’t beleive ARLA are a tenants’ mouthpiece at all. Patrick Bullick is speaking for himself and not ARLA, it’s a shame that it has been reported in this way.
          Vicky Spratt was invited to conference to take part in a debate, not to speak unilaterally. However, she pulled out at the last minute, make of that what you will. If you had attended conference you might know more about the mood of the delegates and the opinions of ARLA on this particular subject.
          It is 100% the London agents that have brought us headlong to this point but as usual it will be the non-London agents who will suffer the most. Meanwhile, tenants will end up paying more and standards will drop.

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          1. pierce

            Thats very interesting, so Vicky Spratt campiagns to get the fees banned and is successful then moves onto the next hot topic?
             
            She may well have had a family emergency or similar but if she decided not to attend through lack of confidence then I am VERY dissapointed. Not very caring of her is it? 

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  3. is it just me

    Thank you Mr Bullick for your support in trying to maintain standards and businesses in an industry you are supposed to be acting in the best interests of. I think it time we all gave up on the useless ARLA and join the new outfit who actually works to protect their membership

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  4. RichardHill61

    Never a fan of ARLA! Never subscribed to their double standard policies in 17 yrs!

     

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  5. marcH

    Load of Bullicks. Just because it makes him “feel uncomfortable” doesn’t mean the rest of us have to work for free. So fees have made agents “unpopular with tenants” have they? What planet is he living on? I don’t want to pay a solicitor, surveyor or the government when I buy a house either but there’s naff-all I can do about that. Typical limp-wristed attitude of those so often claiming to represent and fight for the industry. How can this be, if (unlike ARLA as a whole, I admit) this attitude leads to removing up to 15% of our income (never mind the tax take for the government) at a stroke? What about a sensible cap on fees? Who does this individual think he is – pontificating about the oh so virtuous Client Money Protection gospel (which any decent agent should have already along with their TPO membership, etc etc) and mixing this into the same argument about matters that impact agents’ livelihoods? By all means work towards removing rogue agents from the sector but don’t attack the rest of us through our pockets. What if we all walked away from ARLA and NAEA because they adopted the same stance as this misguided individual? Why would we subscribe to organisations that no longer represented the industry’s best interests? Bullick, I think you should consider your position and resign from an organisation you clearly are unable to support on such a fundamental issue. This is NOT Scotland which already had an ignored statute on the books. This move if introduced in England would require primary legislation and is purely politically motivated. It is up to you to oppose it.

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    1. Traditionalist

      Excellent post.  Just a question though for Mr Bullick, has Stanley Chelsea ever charged tenants admin fees?  If they have, when did they stop?

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  6. lettingsguru

    Bullick, just because your own firm has different policies, procedures and business model, when you represent ARLA, you represent all of ARLA’s members. It is crass to suggest that because your firm doesn’t do it, ARLA should just give up!

    I suggest you, and ARLA take a long hard look at how tenable your position is within ARLA.

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  7. Trevor Mealham

    Well said in parts Patrick. Especially the content around the ‘C’ word on your website. If a group advised lead a directive to set same £ charges that its agents then adopted, your right in what you say.

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