The Government has suggested that it could incentivise agents to ban fees ahead of implementation.
Yesterday, it rejected calls for extra regulations to enforce the ban but did say it would consider proposals that would stop agents and landlords from holding multiple holding deposits from different sets of tenants for the same property.
Speaking during the committee stage of the Tenant Fees Bill in the House of Lords, the Government’s housing spokesman Lord Bourne said advice was being taken on the legality of letting agents and landlords taking multiple deposits.
He said this wasn’t fair and could be a breach of contract.
Yesterday, peers called for regulations rather than guidance on the use of holding deposits to make it clear when they could be retained and to define what a default fee is.
Baroness Grender highlighted the case of a Bristol-based agent called Be Streets Ahead which she said had refused to refund a holding deposit to a group of friends who had withdrawn as one of them had a brain tumour.
She said regulations should allow exemptions for health issues so that a holding deposit could be returned.
Baroness Grender warned that agents were already becoming “more aggressive” on administration fees and called for incentives for firms to already start introducing the fees ban.
Lord Bourne said the Government was keen to avoid regulations and rejected suggestions from Lord Best that a delay in implementation so clear regulations could be agreed may be “a price worth paying”.
Instead, peers agreed to be more closely involved in developing guidance.
Lord Bourne also revealed the Government was engaging with Zoopla, Rightmove and Purplebricks to raise consumer awareness of the fee ban.
Meanwhile, Baroness Hayter used the debate to criticise the Government for upping the coverage needed for client money protection providers to £200m with no cap on liabilities.
She said this excluded RICS and Propertymark as their limit is £5m.
Comments (3)
“Meanwhile, Baroness Hayter used the debate to criticise the Government for upping the coverage needed for client money protection providers to £200m with no cap on liabilities. She said this excluded RICS and Propertymark as their limit is £5m”
I’m not quite sure what the word is to describe this. Restrictive practice? How can two organisation have a cap on liability yet all other potential suppliers have an uncapped liability that will simply exclude competition.
No insurer will accept unlimited liability so its likely those who are perfectly able to provide agents with CMP protection will be forced out of the market. Restricting competition to two suppliers whose premiums are are higher than the need be? that sounds fair and legal!
I have put a reasonable amount of work into preparing for CMP legislation to provide an alternative to schemes provided by Propertymark and RICS. It’s unlikely I will be able to provide the service because the playing field is being skewed heavily in favour of the two trade associations.
Will the uncapped liability apply to the Propertymark spin off firm we were told about earlier in the year? Will that benefit from the capped liability too?
Business protection regulation are designed to prevent unfair and unreasonable practices. If government want a privatised licenced property industry they can have one. What they can’t have is is a 3rd world system of convenient contracts that unfairly favours one party over another.
Propertymark spin off for non members-
https://www.propertyindustryeye.com/new-company-launches-with-propertymark-and-tds-directors/
Update– the wording of the article has caused some confusion RICS and Propertymark have the same concerns as the rest of us. That unlimited liability will possibly result in the industry having legislation to comply with but no-one to underwrite the policy.
” She said this excluded RICS and Propertymark as their limit is £5m” doesn’t mean what that sentence says. Apologies to all offended for my indignation based on that sentence.