From 27 May 2015 lettings agents will have to publicise the fees that they will charge to both landlords and tenants. This statutory duty is in accordance with the Consumer Rights Act 2015.
The act will introduce the requirement for letting agents to display a list of fees and certain other information in their offices and websites from that date.
Lettings agents must display a list of fees at each of the lettings agent's premises at which the lettings agent deals face-to-face with individuals using or proposing to use services to which the fees relate; the list of fees must be in a prominent place where it is likely to be seen. There should also be a list of fees on the lettings agent's website.
The list of fees must include a description of each fee in clear terms to allow the individual to understand the level of the fee is imposed and what it covers.
For example, in the case of a fee which tenants are liable to pay, an indication of whether the fee relates to each dwelling-house or relates to each tenant under a tenancy of the dwelling-house, and the amount of each fee inclusive of any applicable tax. Alternatively, where the amount of a fee cannot reasonably be determined in advance, a description of how that fee is calculated.
If the lettings agent holds money on behalf of clients, the list of fees must confirm if the lettings agent is a member of a client money scheme; in addition it must include a statement that confirms the lettings agent is a member of a redress scheme, and the name of the scheme.
The items on the list must be all the fees, charges or penalties (however expressed) payable to the lettings agent by a landlord or tenant in respect of letting, agency or property management work and or in connection with an assured tenancy or a dwelling-house that is, has been or is proposed to be let under an assured or assured shorthold tenancy.
It is noteworthy, therefore, in addition to the list of fees payable by a tenant, the list of fees must also include fees payable by landlord clients, such as commission rates. It is unclear what the position will be if multiple rates of commission are charged for different clients but it's likely that simply putting the highest commission rate will suffice.
In the event of non compliance this will amount to a breach of the duty to display fees and will be enforceable. Trading Standards can fine an agent up to £5,000. The first step is that they would serve a "notice of intent" upon the agent setting out the proposed penalty and reasons for it. The agent has 28 days to respond. Trading Standards then decides whether to impose the penalty and if it does, will send a "final notice" requiring payment within 28 days. If the penalty is imposed an agent has a right to appeal through the First Tier Tribunal.
It is believed most agents are already adhering to the requirements of membership of a particular professional body and complying with the rules of their redress scheme. However, all agents should check that they are compliant with the new legislation, but those who are not already doing the above need to put measures in place to ensure that they are doing so by 27 May 2015 or possibly face enforcement action.
At TWM Solicitors LLP we have a dedicated team able to advise you and your client on matters of disputes relating to property and Landlord and Tenant Law. If we can be of help to you do not hesitate to contact us.
For further details about our expertise in this area, please Click Here