Letting agents must disclose tenancy fees in advertsWatchdog rules fees must be quoted upfront

06 March 2013

Letting agents must clearly display tenancy fees when marketing rental properties, or they will be in breach of advertising rules, according to a ruling by an industry watchdog.

The Advertising Standards Agency (ASA) says that letting agents should include all compulsory fees and charges in property adverts. Where fees can’t be given in advance, as they will depend on personal circumstances, agents must make this clear and explain how the excluded fees will be calculated.

The ruling related specifically to property adverts from letting agent Your Move on the Rightmove website, which did not include any information about fees. But the ASA has made clear that the guidance applies to all letting agents and property listings.

Guy Parker, chief executive of the ASA said: ‘Our ruling today makes clear that letting agents need to get their houses in order and treat potential tenants fairly. Renting a property is a significant commitment.  

'For those who are new to the rental market, like students, navigating it can be particularly difficult.  That’s why the ASA is clamping down on letting agents who hide fees.’

Letting agents failing to disclose fees

The ruling comes after a mystery shopping exercise by Which? highlighted that letting agents often fail to disclose fees upfront and are unable to provide information on fees in writing.

Mystery shoppers posing as potential tenants visited branches of Foxtons, Barnard Marcus, Martin & Co and Your Move across London. In only one instance did a letting Agent (Foxtons) disclose fee information during a branch visit without being asked. 

On several occasions staff were unable to provide accurate fee information and none of the agents displayed information about fees on their websites or in online property listings.

Our research found that the average cost for mandatory administration and referencing fees across all agents was £310, and the highest was £420. Some tenants could also face check-in and check-out fees, bringing the total closer to £600.

We believe that by failing to disclose fees upfront or during their first contact with a customer, letting agents are breaching consumer law by not providing material information in a manner that is clear and timely.

Which? calls for change in the letting agents market

Richard Lloyd, executive director at Which? said: ‘People should know all the costs before they invest time and effort in viewings. Drip feeding fees is unfair and a major barrier to people comparing agents and properties. 

'Despite its dramatic growth, there is also an alarming lack of consumer protection and redress in the rental sector. Tenants deserve much better.’

We support an amendment to the Enterprise and Regulatory Reform Bill, which would require all letting agents to sign up to a redress scheme, as well as giving the Office of Fair Trading the power to ban letting agents that break the rules.

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