The obligation to display your letting agency fees on your website and within branches has been a requirement for almost two years now, through section 83 of the Consumer Rights Act in 2015.
Amazingly, a substantial minority of agents are still not complying.
There are some who are still unaware of the obligation and that is quite worrying in itself. There are some who know about the requirement, but refuse to comply. There are some that partially comply, by displaying applicant/tenant fees, but refuse to display landlord fees.
I have heard all kinds of excuses from agents as to why they are not doing it, but not one of your excuses will hold water. We all know the real reason – you don’t want your competition to know what fees you are charging landlords!
Basically, all your fees to landlords, applicants and tenants must be displayed. There is no “due diligence” argument you can put forward either, because it is a statutory obligation and any failure leaves you open to action by Trading Standards.
There have been no prosecutions through the courts for breaches and so you might think “Why bother”.
Well, you should bother, because enforcement of this obligation is far simpler for Trading Standards than enforcement of many other obligations. Plus it is financially beneficial to local authorities for them to enforce the obligation.
I said two years ago that agents should be wary, because it wouldn’t take local authorities too long to work out the benefits of positive enforcement.
Officers don’t need to go through the hoops and over the hurdles for issuing summonses – they simply identify the lack of a fees list and issue a Penalty Notice. The process is very straightforward and they can issue penalties of up to £5,000. In fact, the government has made it clear that the £5,000 figure is the default figure and that a lower penalty should only be considered if the enforcement authority is satisfied that there are extenuating circumstances. What these extenuating circumstances might be is anyone’s guess, but to date I am not aware of any agent that has successfully argued the point!
Add to this the fact that Trading Standards retain the penalty money to spend as they see fit and you can see that it is a no brainer for them.
Well, it has taken them a while, but they have seen the light and penalty notices are now being issued around the country. Reading, Milton Keynes, Thurrock, York, Camden … and more.
My advice to you is to check now to make sure you are displaying your fees correctly to avoid these penalties. A token effort by displaying some fees will not be enough. Make sure your branch display is ‘likely to be seen’ by consumers entering the branch and that the fees are displayed somewhere on your website.
The display must show ALL the fees you may impose on landlords, applicants and tenants and include VAT in the figures and percentages you quote. You must explain in the display what services you supply for the fee. It will not suffice to simply state “Application Fee – £150”. You must outline what you will do for £150.
And I am afraid penalty notices are not just confined to fee display breaches. Local authorities can issue them for any of the following, although the penalties vary –
- Failure to be registered with an Ombudsman or redress scheme;
- Displaying boards illegally;
- Not removing boards at the correct time;
- Adding incorrect statements to boards;
- Failure to obtain an EPC.
This enforcement route is the way most new compliance legislation will go, and so compliance becomes far more important.
* David Beaumont, a former Trading Standards officer who has been advising on compliance for agents for many years, is running EYE’s newly launched compliance helpline. This is absolutely free and is exclusive to our subscribers, whether your query is to do with sales or lettings. The number to call is 0161 727 0798.