The estate agent who initiated this inquest argued that they were in line with market practice and requirements from the Association of Residential Letting Agents (ARLA) and The Property Ombudsman (TPO); and because of this, most residential letting agents must now make changes to their advertisements and websites and property portals.
The CAP interpretation of the ASA ruling suggest:
- The ruling applies to ads placed by lettings agents and private landlords.
- The ruling does not apply to fees which an agent charges to a landlord.
- Although the investigation referred only to non-optional administration charges, it also applies to other non-optional charges that could affect the transactional decision of deciding whether or not to arrange a viewing. Those charges include, but are not limited to:
- general administration fees
- reference fees (including credit checks, bank, guarantor, previous landlord, etc)
- application fees
- fees for drawing up tenancy agreements
- inventory fees, including check-in and check-out fees
- guarantor arrangement/application fees
- additional occupant fees
- pets disclaimer fees/additional pet deposit
- The ASA ruling covers (non-refundable) charges that relate to consumers taking on a tenancy. The ruling does not cover those charges that might be levied during the tenancy or at the point of tenancy renewal.
- The ASA ruling does not cover refundable deposits, which we categorise as something separate from a non-optional fee. However, landlords and lettings agents are required, under the Consumer Protection Regulations (CPRs), to provide all material information to enable average consumers to make informed decisions. “Material information” is likely to include more than just the non-optional fees and charges, but also other financial information such as refundable deposits. We therefore encourage landlords and agents to include a note of the deposit and how it is calculated in their advertising.
- Landlords and lettings agents should comply with both the letter and the spirit of the ruling: giving a fee a different name, grouping fees together and calling them something else, using generic statements like “see terms and conditions”, hiding the key information in small print or otherwise attempting to circumvent the spirit of the ruling will not help you to achieve compliance. You need to consider and respond to the principle behind the ruling: the need for more transparency in ads about non-optional charges.
- If a landlord or agent charges tenants for any services that do not apply to all but are non-optional for those to whose circumstances they do apply (e.g. a guarantor’s fee), then they should be considered non-optional charges. Relevant ads must:
- make the existence of that charge clear
- note that it is excluded from the advertised asking rent and
- provide information to allow consumers to establish easily how the charge is calculated.
- Non-optional fees that can be calculated in advance must be included with the quoted asking rent. So, when an agent or landlord charges a non-optional fee that does not change according to individual circumstances, e.g. a fixed admin fee of £150 per tenant, ads should state “£1500pcm + £150 admin fee per tenant” or similar.
- If you do not include an asking rent in your advertising, you need not make a statement about the existence of additional fees.
Ads should make clear whether charges are per tenant or per property.
Click next to continue to read the RLA’s guide to advertising your property. The following pages will include examples of advertising property that fits the new requirements, a conclusion of the decision and information on additional help