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Ban on Letting Agents Fees – A Law still ‘In Progress’

You will have no doubt heard in the news that the latest statement by the Government contained a pledge to ban up-front fees payable to letting agents for residential properties. Anyone who has rented privately through a letting agent will be aware of the (often extortionate) amount of money needed to be paid up-front before you even get the keys.

ban-on-letting-agents-fees-a-law-still-in-progress

Some up-front costs; such as security deposits or a month’s up-front rent, will be unaffected by the new proposal , because this money does not go to the Letting Agent. However, it is not often clear what money does and doesn’t go straight into the pocket of the Letting Agent.

The Consumer Rights Act 2015 made a requirement on Letting Agents to publically advertise the fees they charged tenants in order to set up a new tenancy and any regular charges during the tenancy. Letting Agents must include this information on their website and in their offices. If they don’t, they may be committing a criminal offence. If you notice that these fees aren’t being publically advertised, you can report this to your local Trading Standards.

The situation on the ground, however, is much more confusing. Terms such as ‘Holding Deposit’, ‘Guarantor Fees’ or  ‘Tenancy Drafting Fees’ are all often used to disguise what are in matter of fact simply Letting Agents fees. Many Letting Agents’ income is from the fees that they charge tenants to draft the tenancy and complete other work to set up the tenancy. In reality, the actual costs of drafting tenancy agreements are often far less than is charged by Letting Agents, with the rest going as profit for the Agent. However, provided this information is available in advance, there is nothing under the current law that makes this unlawful.

There has been much debate in the news about whether charging Landlords, instead of the tenant, will ultimately push up rents. It is unclear whether this will be the case; however the move may benefit those on low-income who, whilst may be able to afford the rent, are unable to seek private accommodation as they cannot fund the up-front costs.

Whilst it is the intention of the Government to ban these fees in the future, there has been no change in the Law which will change the current position. So, for the time being at least, Letting Agent fees are a necessary burden that many would-be Tenants will have to bear for the foreseeable future at least.

Swain & Co Solicitors regularly win cases related to Tenant Rights for their clients who have been treated unfairly by their landlord or the letting agency. If you, a family member or a friend have treated unfairly by your landlord or your tenant agency contact our housing team Portsmouth/Havant on 02392483322 or Southampton on  02380233181. Alternatively click here to fill out our quick request a call back from so one of our team member will be in touch shortly.

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