Lettings agents that hide fees face £5,000 penalty

Lettings agents that fail to display full details of all fees they charge landlords and tenants face fines of £5,000 from today.

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Consumer Rights Act imposes a duty on letting agents to publicise full list of fees

Andrew Bulmer, UK residential director of the Royal Institute of Chartered Surveyors, explains: “Chapter 3 of the Consumer Rights Act 2015 imposes a duty on letting agents in England and Wales to publicise a full list of their relevant fees prominently in their office and on their website.”

He adds that all fees quoted must include taxes. They must also cover any additional fees, charges or penalties that may be incurred during a tenancy as well as fees, charges and penalties that are referenced in tenancy agreements and in terms of business.

Guidance notes published by the Department for Communities and Local Government state: “The policy intends to improve the tenant and landlord experience by requiring agents in England, but not Wales, to publish which redress scheme they are a member of and whether or not they offer client money protection. This ensures renters and landlords have all of the required information up-front.”

The guidance also confirms: “The list of fees must be comprehensive and clearly defined. There is no scope for surcharges or hidden fees. Ill-defined terms, such as administration costs, must not be used.

“Where a fee cannot be reasonably determined in advance, the list should describe how a cost is finally calculated.”

The DCLG does make clear that the legislation only applies to lettings agents and their chargeable activities. It does not apply to landlords.

However, penalties for failing to comply with the new rules, which came into force on 27 May, will apply to every branch of a lettings agency.

The government explains: “The expectation is that a £5,000 fine should be considered the norm and that a lower fine should only be charged if the local authority is satisfied that there are extenuating circumstances.”

Simon Roberts, of Reading-based legal practice Field Seymour Parkes, says: “A local authority can issue a fixed penalty fine of up to £5,000 to a letting agency branch that does not comply with the new legislation. Letting agents with multiple branches could face multiple fines.”