Estate and letting agents have been known to complain bitterly about the increasingly frequent pieces of new legislation affecting the property industry the government has introduced over the past few years.
While we appreciate every new rule or regulation is designed to increase the levels of protection available to landlords, tenants, vendors and sellers, many put unnecessary obstacles in the way of property professionals who are trying their hardest to maximize the value of their clients’ residential and commercial assets.
Take Energy Performance Certificates. Since 2007 it has been necessary to produce an EPC whenever a property is constructed, sold or let out.
But when it became law that an EPC had to be issued before the property’s sales brochure could be produced in April 2012, this delayed an estate or lettings agent’s ability to market the property immediately.
Not only does this stop us achieving a sale or let in the shortest time possible, the certificates are produced for vendors, who are unlikely to act on the recommendations because they are selling the property.
Consumer Rights Act 2015
But the Consumer Rights Act 2015, which came into force at the end of May, is a piece of legislation that letting and management agents throughout England and Wales should welcome.
The most common questions put to SW19 estate agents by both landlords and tenants is: What are your fees and how can you justify them?
Section 83 of the Act relates to fees, charges and/or penalties and aims to create full transparency by revealing exactly how much landlords and tenants will pay before they enter into any form of contract or agreement.
The main points of Section 83 to note are that…
- The description of each fee must enable the person who is liable to pay it to understand the service or cost that is covered by the charge or why it is imposed.
- All fees, charges and/or penalties must be quoted inclusive of VAT.
- Fees, charges and/or penalties must be displayed prominently (where it is likely to be seen by landlords and tenants) at all premises where the agent deals face-to-face with potential and actual tenants and landlords. The test of whether they are displayed correctly is likely to be whether the consumer had to ask to see the fees list.
- Fees, charges and/or penalties must be displayed in full on the agent’s website.
- Surcharges and hidden fees must not be used.
- It must be clear whether the charge is per property or per tenant.
- If the fee cannot reasonably be determined in advance, it must be clearly explained how it will be calculated.
- There should be no duplication of charges between tenants and landlords – although it is acceptable to split charges between those parties, provided this is clearly explained in relation to the total cost of the specific service.
- English Agents in England must publicise their Property Ombudsman membership, if this is their chosen redress scheme, through their website, office documents, window display, terms of business and fee list) plus any client money protection scheme membership.
Trading Standards will be enforcing these new rules and have the ability to impose a fine on the letting or management agent of up to £5,000 for non-compliance.
Here at Robert Holmes, we’re happy to say our fees and charges can be found here.
Making our fees and charges clear and transparent helps our clients and sends out a message that we put the interests of both landlords and tenants at the top of our priority list. After all, a tenant who is happy in a let property is less likely to terminate the agreement at the earliest possible opportunity.
If you have property to let out, or are looking to rent residential or commercial premises, contact Robert Holmes today.