Letting agents will have to include their charges to tenants in all their advertising from now on. The move could also affect landlords.
The Advertising Standards Authority made a ruling this week against Your Move agents after it advertised a property on the portal Rightmove without mentioning the admin fee it would be charging tenants.
The advertising watchdog said that the advert broke the rules – effectively, telling the entire letting industry that agents must not advertise rental properties without disclosing their fees within the advert itself.
Guy Parker, chief executive of the ASA, said: “Hidden fees are not only unfair, they hit those who are struggling hardest. Our ruling makes clear that letting agents need to get their houses in order and treat potential tenants fairly.
“Renting a property is a significant commitment. And 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.
“Today’s ruling makes clear that agents must include all compulsory fees and charges in their quoted prices. If the fees cannot be calculated in advance, then the agent must make clear that fees have been excluded, and provide enough information for consumers to establish how fees are calculated.
“It’s now our priority to make sure agents across the sector bring their advertising into line.”
One difficulty is that Rightmove specifically bans fees from being mentioned in adverts on its site. Another is that fees typically vary – for example, if the tenant who takes the property needs a guarantor or owns a pet.
However, the ASA ruling has piled yet more pressure on the whole subject of letting agent fees – which are illegal in Scotland, and which have been the focus of a Shelter campaign in England. The ban in Scotland also affects landlords, stopping them from charging fees to tenants such as for referencing or move-in checks. Lawyers are now looking at the implications of the ASA ban to see if this will affect landlords.
The day before the ASA ruling, a Which? report named four London agents that it accused of potentially breaking the law by not disclosing their fees. The four were Marcus Barnard, Foxtons, Your Move and Martin & Co.
A spokesperson for Your Move said: “Your Move is committed to regulatory compliance as demonstrated by active participation in The Property Ombudsman scheme and the Association of Residential Letting Agents and is therefore disappointed by the ASA Council ruling.
“Your Move follows good industry practice and is compliant with the ARLA and TPO Codes of Conduct and the Consumer Protection Regulations.
“All material information, including tenant fees, is provided prior to tenants making their decision to enter into a Tenancy Agreement. This complies with the OFT’s Guidance for Estate Agents.
“Your Move also complies with the contractual requirements of Rightmove where publication of fees within advertisements is expressly prohibited.
“Your Move is updating references to fees in lettings advertising and will continue to take any steps necessary to comply with CPR as we currently interpret it.
“In view of the ASA decision, we continue to ask the OFT to produce official guidance for lettings urgently to ensure greater clarity and uniformity across the industry.”
The ASA ruling is that agent advertisers will now have to make clear their compulsory fees and charges.
It says that if the fees cannot be calculated in advance because of, for example, an individual’s circumstances, then the advertiser must make clear that additional fees and charges have been excluded and provide enough information for the consumer to establish how the fees are calculated.