A mystery shopping investigation of 20 letting agents by consumer watchdog Which? claims to have identified practices that could be illegal.
Which? is now calling on the Competition and Markets Authority to investigate issues relating to practices and tenancy terms and conditions in the rental sector.
The consumer group’s mystery shoppers asked to see a copy of the tenancy agreement they would be signing up to across 20 letting agents in England – but one in four agents failed to provide a contract.
Five letting agents, including a branch of Connells, required a commitment or a holding deposit before the tenants could view a sample tenancy agreement, the investigation found.
In some cases, the letting agent also requested a reference check to be paid for and completed before they saw the terms of the contract.
The investigation also found that three of the letting agents who required a commitment or deposit before tenants could see a contract are members of ARLA Propertymark.
However, Connells told us that tenancy agreements are freely available on request.
The agent said in a statement provided to EYE: “This is not company policy: the draft tenancy agreement is freely available on request and we certainly do not insist on a deposit being paid as a condition of providing the draft.
“Staff have clear directives on best practice and we would be keen to know the branch in question and circumstances surrounding the request in order to refresh our colleagues’ understanding of this and their obligations to the customer.”
Additionally, in 13 tenancy agreements collated and inspected from other letting agents, Which? investigators said they found evidence of potentially unfair terms and clauses that could be in breach of the Consumer Rights Act.
In seven contracts analysed, tenants were required to seek permission or notify their letting agent or landlord before switching utility supplier, which the research warns may leave renters stuck on rip-off tariffs.
Which? also found evidence of unclear language that could confuse tenants in at least eight contracts. These agreements included vague descriptions that tenants may be required to pay a “reasonable” amount or “a fair proportion of” additional charges.
All the contracts reviewed referenced statutes and legislation that were not attached or explained further within the agreement.
In all but two agreements, Which? found a clause that allowed landlords or authorised workmen access to the property without prior consent, as long as 24 hours’ notice was given.
It was not always specified that this notice should be in writing.
The investigation also analysed a template tenancy agreement from the Ministry for Housing, Communities & Local Government (MHCLG) and said it could be made clearer that tenants can push back against landlords seeking non-urgent access at inconvenient times.
The agents in the Which? exercise included Connells, Reeds Rains, Bairstow Eves and Linley & Simpson.
Natalie Hitchins, head of home products and services at Which?, said: “It is outrageous that some agents are demanding cash up front before tenants are even shown a contract – committing them to agreements before they know what they’re signing up to.
“The results of this Which? investigation show how vital it is for the Government to introduce a legally enforceable code of practice to ensure all letting agents act in a professional manner.
“The Competition and Markets Authority must also investigate the sector and take action where needed to tackle unfair practices and contract terms.”
However, ARLA Propertymark has disputed the findings.
David Cox, chief executive of ARLA Propertymark, said: “There is currently no legal requirement in England or Wales to have a tenancy agreement, and as legal statute overrides contract, any unreasonable terms in a contract would be unenforceable in a court of law.
“As such, we would question the suggestion that agents are breaching consumer protection law.
“We have long been advocating for a legal requirement to have a written tenancy agreement, as they have in Scotland, to avoid many of the misunderstandings cited in this research.
“Which? implies that even MHCLG’s template tenancy agreement is in breach of their best practice. This demonstrates just how complex the issue around terms and conditions can be.”
Findings
Asked our mystery shopper to pay a deposit or make a commitment to the property before tenants could view the tenancy agreement:
- Oakmans Estate Agents
- Thistle Estates
- Linley & Simpson
- Burchell Edwards
- Connells
The tenant was asked to make an appointment with the letting agent to view the tenancy agreement:
- Hogans Estate & Letting
Included a clause where tenants had to gain consent or notify their landlord before switching utility provider:
- Alwyne Estates
- Blue Dwelling
- Daniel James
- London Golden Key
- Oakwood Properties
- Oasis Living
- The Property Outlet
Included a clause that allowed landlords or authorised workmen access to the property without prior consent, as long as 24 hours notice was given without limiting that right to urgent or emergency situations:
- Alwyne Estates
- Bairstow Eves
- Chappell & Matthews
- Reeds Rains
- Blue Dwellings
- Daniel James London
- Golden Key
- Madina Property Services
- Oasis Living
- Temple Homes
- The Property Outlet
- MHCLG template
Included vague descriptions of costs and charges, for example including but not limited to ‘fair proportion of charges’ and ‘a reasonable administration charge’.
- Alwyne Estates
- Reeds Rains
- Blue Dwellings
- Daniel James
- London Golden Key
- Madina Property Services
- Oakwood Properties
- Oasis Living
- Temple Homes
- The Property Outlet
Referenced statutes and legislation that were not attached or explained further without adequate explanations what those charges would be for:
- Alwyne Estates
- Reeds Rains
- Bairstow Eves
- Chappell & Matthews
- Blue Dwellings
- Daniel James
- Golden Key
- Madina Property Manchester
- Oakwood Properties
- Oasis Living
- Quarters of Leeds
- Temple Homes
- The Property Outlet
Comments (12)
Another day another attack on letting agents. I like the way this whole complaint is based on a sample of 20 Agents!! How many agents are there in the UK!? Really indicative of the industry.
Shame on those agents who ‘Referenced statutes and legislation that were not attached or explained further without adequate explanations what those charges would be for’ Obviously those tenants who struggle to understand what a ‘reasonable amount’ means, will have a full and clear understanding of, lets say Law of Property Act 1925, Landlord and Tenant Act 1985, Landlord and Tenant Act 1987, Cost of Leases Act 1958, Housing Act 1988, Housing Act 2004, Immigration Act 2014, Deregulation Act 2015, Consumer Protection Regulations 2018.
Most agreements I have encountered in my 30 + years in lettings have clauses advising the tenant to seek advice from a solicitor or Citizens Advice if they do not understand the terms contained in the agreement.
Oh, wait a minute, if a tenant has to seek advice from a solicitor, they will have to pay – would that count as a prohibited payment as they really shouldn’t enter into a tenancy without that advice …… maybe the agent should pay the solicitor too
If the allegations are true … who is in the wrong? Wake up call for any letting agent who doesn’t know what they are doing and better supervision/training of staff.
When businesses become heavily regulated without proper reward then it’s time to move onto bigger and better things.
Connells claiming that their draft contract is available on request with no commitment but two group brands (Connells and Burchell Edwards) telling Which that it’s not, once seems careless twice seems deceitful.
It sounds like thry talked to 2 different people. We aren’t doctors , these kids in agents are just trying to get on in life.
Better off being a plasterer these days taking cash off old grannies. . Totally dodgy but out of the public eye .
Is there a lot of pent up demand from grannies for plastering then?
I’m readying up to sue one. If these agents in negligence – in a few months time once I’ve lined up all my ducks. Needless to say, I don’t rate them highly, so am not surprised at these findings…
Why are landlords and agents always portrayed as villains and everyone is after them. Literally they’re being chocked to death… how facilitating are courts and organisations when a tenant refuses to pay rent or keeps requesting to pay at a later date … then can do a runner witb unpaid rents?? How easy and cheap is it to trace and recover dues from tenants? Solicitor ,court bailiff fees are so high that many landlords just quit the chase on the basis that it’s not worth going to courts and solicitors. An agent or landlord has to pay insurances or be member of schemes to overcome this… tenants also know this and exploit the situation. In the last couple of years I’ve not come across a single legislation that makes not paying rent having severe consequences for tenants. Many landlords selling up due to having little to no say /control over their properties. Tenant fee ban will make it even more difficult for renters to get a property . It’s ridiculous to read that you have to have consent of the tenant to visit a property. Yes you have to inform a tenant and co-ord with them but imagine asking a tenant Dear XYZ can we Please come to my property to fix a thing YOU BROKE , for YOUR own CONVENIENCE at a time of YOUR convenience… and the tenant replies NO … I strongly believe that less the exterior of the building, all things prevent inside a premises should be under the maintenance responsibility of the tenant . I mean why the tenant is given all rights and liberties on the surface of the earth and the landlord is always skinned to the bare bones. Many landlords have had their properties confiscated / repossessed due to bad tenants not paying rents… why are the courts letting the tenants off relatively cheaply?? Has anyone heard a tenant being heavily fined or court being strict on them? A tenant owing thousands can just say in court I can only afford £20 a month and the landlord has to accept that. This could mean that the tenant has to pay back over decades… who will compensate the landlord for the current loss and the mortgage payments that are due ?? Let’s say the tenant even stops paying the £20 a week too. Again one has to knock the doors of courts… or the tenant could just abandon the property. Which has the energies money and time to start tracking down a tenant ?? It’s as obnoxious as it can get ….
what you describe is the reality. Iam not sure where this ends but any estate agent boss who recruits innocent people to this stressful bloodbath of an industry should warn these people.
Something along the lines of that thry will be more highly thought of if thry get a sleeping bag and beg in the streets ( probably earn more as well)
ARLA should be standing up for the genuine agents and saying that agents caught trying to charge before seeing a tenancy are wrong. If they are an ARLA member, then more than likely they are a TPO member. The TPO code of practice for a letting agent *9e* requires an agent to provide a specimen tenancy to the applicant before ANY fees are taken
So I would suggest David Cox is wrong, because under consumer protection regulations, you are obligated to be a member of a redress scheme, so by default, you have a legal obligation to follow the code of practice. Maybe ARLA should send David Cox to the course they are running with the TPO about the code of practice and best practices on the 27th June 2019 in Central London, so he can learn the rules. I assume he can get a staff discount.
Where does which? Expect the funds to come from with no money ? Public expects agents to act like banks who have billions in reserve.
Time gov’t either took it public (good luck with that tensnts) or stopped harassing these small companies.