MSE News: Plans to ban letting agent fees unveiled

Former_MSE_Nick

The Government has today set out further proposals to ban letting agents from charging administrative fees to tenants...

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'Plans to ban letting agent fees unveiled'

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phill99

About time. This is one of the biggest scams of recent years. It is typically the poorest an most vulnerable that have to pay these fees. Letting agents are one of the only 'professions' I know that take fees from both parties.

G_M

Though they've not been allowed to charge both parties for the same service for some time now.

https://tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/TPOE22-5_Code_of_Practice_Residential_Letting_Agents_A4_-_effective_1_Oct_2016.pdf

5n You must not make a tenant or landlord pay a charge for or be
liable for an element of your service that the other party has
also been charged for in the course of the same transaction.

phill99

G_M wrote: »

Though they've not been allowed to charge both parties for the same service for some time now.

https://tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/TPOE22-5_Code_of_Practice_Residential_Letting_Agents_A4_-_effective_1_Oct_2016.pdf

But they still do. It's widespread.

dotchas

Not in Scotland

kilby_007

G_M wrote: »

Though they've not been allowed to charge both parties for the same service for some time now.

https://tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/TPOE22-5_Code_of_Practice_Residential_Letting_Agents_A4_-_effective_1_Oct_2016.pdf

Quite an easy one for the letting agents to get around. Just say they're charging for two different things. Call it what you want - credit check, finders fee, reservation fee, initiation fee, agent viewing charge. I'm sure there's plenty of ways around it... at least the new ruling prevents this.

G_M

All very true. But I repeat: "Though they've not been allowed to charge...."

People in all walks of life do things they're not allowed to do, or find ways to describe what they do in such a way as to cirumvent the law.

In this context, if more landlords and tenants actually challenged agents on the fees being charged, using the relevant ombusman schemes, the practice would not be so widespread.

Miss_Samantha

G_M wrote: »

Though they've not been allowed to charge both parties for the same service for some time now.

They are still perfectly allowed to, provided that the landlords agrees.

You quote from the TPOS rules, which only apply to TPOS members.

Moreover that rule is ill-thought and makes me think that, once again, they do not understand agency.

Murphybear

G_M wrote: »

All very true. But I repeat: "Though they've not been allowed to charge...."

People in all walks of life do things they're not allowed to do, or find ways to describe what they do in such a way as to cirumvent the law.

In this context, if more landlords and tenants actually challenged agents on the fees being charged, using the relevant ombusman schemes, the practice would not be so widespread.

Agree completely. I have been looking for a new rental property for some months. I have been a bit shocked at how high some of the fees are and how untransparent. I am not talking about big cities but West Country rural areas where prices are high and wages can be low. I am wondering with my cynical hat on whether some of the agents have raised their fees in preparation for the new rules.

What is even more infuriating is that I know how the system works from the inside. Before I retired I was an ARLA letting agent. We charged one of the lowest fees around and were swamped with tenants and landlords. We saw a property we really liked a few days ago and after revealing my ARLA background I challenged the fees and made it clear I knew they bore no resemblance to the actual costs. He said "make me an offer" and I did, I suggested half price and he agreed immediately:T. I also got a reduction in the rent as the property had been on the market for a while.

I realise this tactic won't work for everyone but it's worth a try.

I hope the Government really moves on this and it doesn't take years to implement.

Miss_Samantha

Murphybear wrote: »

We saw a property we really liked a few days ago and after revealing my ARLA background I challenged the fees and made it clear I knew they bore no resemblance to the actual costs.

Prices do not reflect costs but what people are willing to pay. One would have thought you understood how business works if you were indeed ARLA.

Pincher

This is the general breakdown in business ethics.

Anything that can be abused will be abused, by low life time share salesmen. You clamp down on private parking, they just move on to the next thing.

There was an old scam, where they advertise a cheap accommodation, make you pay a non-refundable £50 registration fee, and then show you a truly disgusting flat, so you won't take it. Even if you are insane enough to want to move in, the flat is suddenly not available any more.

Foxtons used to be a decent company, until they were bought up by some slimy private equity company, who proceeded to squeeze as much profit as they can out of it. A few year ago, I could see Knight Frank try to jump on the charging tenants bandwagon, but fortunately the negative PR due to Foxtons made them back off. Instead, they changed the practice of taking their commission monthly, as the rent comes in, to grabbing everything in the first two months. It's a policy that says: we have our cut, any problems is your nightmare. There is usually a break clause, so the tenant can give notice and leave early. They are taking commission on money that may never come! A crooked agent could deduct an admin fee for refunding the partial commission, just like insurance companies try to do if you sell a car half way through a policy.

They can invent fees/charges at the drop of hat, how can you possibly keep up by legislation?