Some 1,000 letting agents are expected to attend a webinar on the tenant fees ban next week.
Between them, the agents so far registered have submitted over 300 questions in advance – a sample of which is below.
Next Wednesday’s webinar is the last in a series of three. It will again be led by ARLA chief executive David Cox, and is being put on by Goodlord.
An expected 2,500 agents will altogether have attended the sessions.
The huge interest shows just how critical the issue is to the industry – and many of the questions reveal significant confusion over what can and cannot be charged when the ban comes into effect on June 1.
The ban will outlaw numerous practices that are currently common in the lettings industry in England and Wales, with possible fines of up to £30,000 per offence.
The most common questions submitted so far include:
- How do we prevent applicants making multiple applications?
- If a tenant surrenders a tenancy during a fixed term contract, what financial penalties can be imposed on the tenant?
- Can you request tenants carry out their reference check via accredited reference companies and send you their report?
- What are the permitted costs chargeable to a tenant, such as change of sharer or loss of keys?
Other questions show that letting agents are also unsure about the new rules around holding deposits.
One agent in Bristol asked: “On what grounds can the initial holding deposit be withheld from a prospective tenant?”
Another questioned how protected deposits could be refunded: “We are currently with the Deposit Protection Scheme, which is saying there is still no way we can part-release deposits – does this mean we will need to go on to periodic tenancies?”
Many letting agents have questions about tenancy applications already in progress on June 1.
“Can we charge existing tenants a renewal fee after June 1 2019 if we prepare a renewal contract for them?” asked one agent in the south-east.
“Can we charge applicants applying before June 1 but whose tenancies will not start until after?” asked another in Yorkshire.
Goodlord CEO William Reeve said: “We are investing hundreds of thousands of pounds in the Goodlord platform to ensure all of our clients can sleep soundly on June 1.
“But it’s clear that many letting agents remain unsure about the full implications of the upcoming tenant fees ban.”
The webinar takes place at 9.30am on Wednesday, May 1 – exactly a month before the ban kicks in.
There are only 1,000 places available and the organisers are expecting a full house, so don’t hang about.
Comments (15)
Indeed government has demonstrated their usual level of thoroughness wihin their TFB guidance. Page 51: how to calculate their laughable idea of a meaningful default fee for non payment of rent, and I quote ‘1. the annual interest would be £80 (500 x 0.06 = 30). WHAT. AN. ABSOLUTE. JOKE.
What we should be asking of our Landlords is do you still want reference checks and the same level of due diligence we currently provide, because if you do there will be a further cost implication after June 1st?
Letting agents should also be aware that their whole business model could change due to the tenant/applicants having no financial risk attached to applying for multiple properties. We have decided that fee ban or not, our vetting process will be even more strict as we do not want, nor can we afford wasted time.
Good Lord knows where all the low income tenants are going to live after this fiasco, lack of social housing, landlords exiting the market, agents becoming more choosy, low rent properties no longer profitable, so not available, rent increases due to landlord cost increases.
As a company with no tenant rent arrears and few void periods, we know we are worth every penny, and more importantly, our landlords and tenants are happy, but let’s see what the big wooden spoon of politics stirs up, probably a load of avoidable sh** as usual.
‘We have decided that fee ban or not, our vetting process will be even more strict as we do not want, nor can we afford wasted time.’
Agreed and in this case i would avoid Goodlord like the plague as their referencing offering is diabolical.
Agents beware, cheap can be very expensive; https://www.linkedin.com/pulse/letting-agents-let-alliance-andy-halstead/
Does anyone know the full implications?
No doubt, there will be a few test cases, as some agents try and circumnavigate the legislation, I am still not convinced that advertising a property with pets at a higher rent, then without pets, as advised by David Cox is compliant.
The legislation and guidance is conflicting in certain areas (no surprise), so it will be interesting to see how this pans out in reality.
I must admit the pets thing is confusing me too. How do you legislate for where a landlord has been previously persuaded to accept a pet in the house as long as a pet deposit is paid (which is how we currently operate), and then after June (or 12 months after for exisiting contracts), we have to refund the deposit that we’ve previously taken? I can see issues where the pets have damaged carpets etc – and landlords will come after us for at least the value of the pet deposit as that’s the basis that they accepted the tenancy? Also if you increase the rent offer to cover the cost of a pet – do you have to reduce the rent if the pet dies? If you’ve issued a contract and then someone gets a pet whilst they’re in contract how do you increase the rent? That bit of it is a bit bonkers – if someone has a puppy that lives for 12 years and you’ve increased the rent by say £10 a month, you’ll potentially have collected an extra £1200 that is refundable. Currently we charge £200 as a refundable deposit for a pet if there’s no damage and the carpets are cleaned.
edited to remove the overuse of the word refundable. 🙂
I believe if the tenancy goes periodic you do not need to return the difference in deposit. With regards to pets joining mid tenancy, the tenant should get permission from the agent/landlord and part of that permission would be a pet surcharge. If they don’t agree then the pet is not allowed. By definition if the pet dies then yes this would need to be retracted but a refund of previous payments would not be required (it is not a deposit), if the pet caused damage it would still be there after it had died. Just need to ensure landlords and tenants are aware of what the surcharge is for and the terms. Of course you could just increase the rent without mention of a pet charge and that way there would be no need to reverse it in the event of the pets death.
I think I’m just going to ask the Landlord if they will accept a pet, and if they say yes, advertise it at £25 higher, even if it is taken by someone without a pet!
Pet free properties will stay the same rent.
Read the legislation.
Yes it really isn’t that hard to understand if you look at the legislation. Part of the issue is some agents expect to be spoon fed. Noone one knows the effect this will have on the market but the rules to abide by are pretty clear.
Government have even issues guidance notes for the bill
that does not mean the guidance is correct, you only have to remember the big super strike decision on deposit compliance , to know that following government guidance should be taken with a large tablespoon of salt
What else are you going to do other than follow the legislation and guidance? Regardless of past cases you just have to follow what you have been told. You can’t just make it up. You basically cannot charge the tenant for anything other than above and beyond services (breaking/changing contracts or tenant faults) it really is that straight forward. The holding deposit has to be held for no more than 15 days unless otherwise agreed by the tenant or the deal has fallen through, whichever. Most tenancies we have start easily within two weeks of application so this shouldn’t be an issue on the whole. We have had three years of build up everyone should know whats coming by now.
Never that simple. Also why should letting agents spend money and time working out how the govt. will cost them £10000’s every year in admin fee’s, just for a populist agenda?
Absolute joke.
Unfortunately we don’t have a choice.