Important new requirements for letting come into force today (27th May 2015) and the RLA has issued guidance to ensure letting agents are aware of what needs to be done. It is now a legal duty for letting agents to have any fees explained under Consumer Rights Act 2015. PLEASE NOTE: the requirements refer to what you do, not how you define yourself. If you are a landlord but help manage properties, you should consider how these new rules apply to you.
You can view the new guide for letting agents by clicking here: Publicising fees as a letting/managing agent.
Over the past 12 months letting agents have had a raft of new legal duties placed upon them such as signing up to one of three redress schemes, Consumer Protection Legislation, and now fee transparency.
The letting agent must provide information to both the tenant and landlord regarding costs so they know how much a tenancy will cost. These figures must include VAT.
Some of these items include:
- Fee information must be displayed on their website and somewhere clearly visible in their office(s) to anyone entering
- It must be clear if the charge is made per property or per tenant
- The requirement is for a comprehensive list of everything that a landlord or tenant could be asked to pay by the letting agent at any time before during or after a tenancy
- Agents cannot use terms like administrative costs and must be inclusive of VAT – any charges must be clearly explained and include VAT
- The only exemptions are for rent payable to the landlord, tenancy deposits and for services such as hiring a gardener where the agent takes no cut of the fee from a landlord
- Agents must publicise whether they are a member of a client money protection scheme and which redress scheme they have joined
If the fees cannot be accurately determined in advance you must explain how it will be calculated at the time.
Trading Standards can levy fines up to £5,000 and fines can be applied repeatedly for repeated failure to comply. The full £5,000 fine is expected to be the standard amount unless there are clearly mitigating circumstances. There is an appeals process.
These items are now legally required. If you are a letting/managing agent, it is important that you make sure that you work within the law.
For more detailed information, be sure to visit the guide: Publicising fees as a letting/managing agent