Best-selling buy-to-let author and consultant David Lawrenson says that tenants in England and Wales are as much in the dark as ever about letting fees.
This is despite the Consumer Rights Act, which came into force last May, requiring letting agents to show their fees.
Lawrenson says the law is not working.
He says that this is because the fees are not displayed on the places where tenants actually look – the property portals.
Lawrenson said: “In many cases tenants still won’t know about these fees until the eleventh hour, when they are about to sign a tenancy agreement.
“Basically, the law was designed badly, in that it fails to take account of the way that most tenants now search for rented accommodation – which is by using the portals.
“The rules on displaying fees only applies to adverts on letting agents’ websites.
“But these days, the vast majority of tenants will perform a search from their desk or hand-held device that will begin and end at the big portals, the main ones being Zoopla and Rightmove.
They won’t visit the letting agents own websites and they won’t go into a branch, until they are about to sign the tenancy contract.
“According to James Davis at online letting agent Upad, over 90% of tenants will just search online.
“The letting agents know this too – which is why they pay over huge sums to the big portals to get their adverts for rented accommodation on the portals where they will actually be seen by tenants looking to rent a property.”
However, Lawrenson said that on Zoopla he found adverts with no information about fees at all.
He says that Zoopla told him: “We make it very easy for letting agents to display their own fees on the site in a ‘fees apply’ pop-up beside the price.
“When you do not see a ‘fees apply’ link on the Zoopla listing you may find the fees details in the body copy of the listing.
“This is because the software that the agent is using may not directly support sending letting fees in a specific field in their data upload.”
Lawrenson said: “I think the key phrase in that statement is ‘may find fee details’.”
On Rightmove, he said, there is a ‘fees apply’ box, but the amount of information varies and might only say that a range of fees will be charged, without actual fees being stated.
Lawrenson said: “Rightmove told us they try to police this – and ensure that fees are shown. But it seems, like Zoopla, they like to leave it up to the letting agents to decide whether to supply them with information on tenant fees or not.”
Lawrenson said that he does not blame the portals, only the law – although he does say that some letting agents are not exactly falling over themselves to supply fee information.
He said: “The legal responsibility for showing fees should have been placed on anyone connected with letting private rented accommodation (which would include the property portals), to display the correct fees in full, via one click from their website.”
Lawrenson is author of ‘Successful Property Letting – How to make money in buy to let”
Should be a “total move in fee” based on 2 people and ability for tenants to search by “total move in fee” on the portals.
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Another case of Trading Standards ‘turning a blind eye’.
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Many agents also fail to display their landlord fees. It is blatant disregard for the law (badly written or not) and, as usual, not much policing/enforcement going on. Another kick in the teeth for landlords, tenants and law-abiding agents.
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I know “the law’s the law” but why can’t tenants and landlords simply ASK the agent what their fees are if it’s such a big deal for them. Of course good agents will display them where the law requires them to, but we can’t always rely on armies of jobsworths running around everywhere to make sure (inadequate/ badly drafted) laws are observed to the letter….
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I have to say that as we are one of only a handful of agents in our town that displays all fees – landlords and tenants we have been compromised; we see fewer landlord enquiries and have noticed that the agents that do not display fees are getting a bigger share than they used to of new instructions. Only a few weeks ago though I was approached by a landlord from another agent who, having let his house, came to me to query the fees charged by his agent! Despite our management fee being higher, by the time all the other agents add-on fees were included he would have been some £400 better off coming to us in the first year!
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To be fair that’s being going on since the first caveman brought a second cave to rent out.
The amount of landlords who only ever ask for the headline commission cost reveals a depressing lack of vision.
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Prior to this law, there was an equitable position in that no fees were advertised. Now, this bit of legislation has benefited those that do not conform to it; very odd outcome!
The reality is that prospective tenants very rarely enquire about fees, being so focused on securing the property. That said, I am in favour of fee disclosure.
It would seem to me that it is up to the law abiding agents to make a stance and report offenders to re-establish the previously existed equitable position.
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There should be a statutory disclose of fee’s in writing attached to all property brochure’s. Now that should get a few dislikes from those that still hide fees?
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What if there was a rule saying an agent must pay the tenant 3 times the total rent when the tenant moves out, unless the agent can prove that all fees the tenant has been charged where listed on the portal advert? The portals should be made liable in the case the agent does not or cannot pay up….
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A storm in a tea cup, really.
Tenants will be asked to pay the fees when they apply, so they can decide at that point.
They can, and should, obviously also ask when they agree to pay a holding deposit. Would you pay a deposit to a plumber without asking for his fee?
I think councils have much more important business to attend to, but at £5000 a pop enforcement may be profitable.
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The idea behind making sure all tenant fees are shown up front (including VAT remember!) is definitely sound. I’ve seen the same properties being advertised by different agents before, for the same rent, but with each agent having different fees – sometimes hundreds of pounds different.
To a tenant, that is a lot of money.
And it doesn’t break down to the cheaper agent being the worst. I’ve seen terrible agents with sky high fees and good agents with reasonable ones.
I’ve also seen the same as the above, where the same property has been advertised at the same price, but the agents have not listed their fees. Which means pot luck for the tenant, who could end up losing a couple of hundred pounds just by picking the ‘wrong’ agent.
What is definitely lacking is the bodies who should be enforcing this making sure that it is enforced. I can understand the issue the portals have with the feeds and so on and making sure the agents supply the data, but if the ASA would beef up their message, the feed companies would have to make sure that they update their systems. RightMove and OTM seem to trying to make sure the info is there, at least in some form, but Zoopla look to have dropped the ball.
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