Councils visit letting agents to make sure books are open

Tower Hamlets' and Hackney's council will make sure letting agents keep their books open. Pic: David Cheng

Tower Hamlets’ and Hackney’s council will make sure letting agents keep their books open. Pic: David Cheng

Residential letting agents in Tower Hamlets and Hackney are being monitoring by the local authorities in both areas to  check their compliance with new legislation which requires all fees and costs associated with rental agreements to be clearly available to prospective tenants.

The recent addition to the Consumer Rights Act 2015,  which came into effect last weekend, makes it a statuary requirement for all letting agents to publish the fees, charges or penalties that a landlord or a tenant could face at any time before, during or after a tenancy.

To enforce the new rule, the two councils have said they will carry out visits to make sure a list of fees is clearly on display at the agent’s premises, anywhere that the agent deals face-to-face with its customers or online where appropriate.

As a result of the initiative, they want to make sure ‘there should be no surprises’ for landlords and tenants in their transactions.  They say this is so that consumers will understand what a service or cost is for and why it is being imposed.

“The list of fees must be comprehensive and clearly defined; there is no scope for surcharges or hidden fees. Ill-defined terms such as administration cost must not be used. Where a fee cannot be reasonably determined in advance, the list should describe how a cost is finally calculated,” say the guidelines in the Consumer Rights Act 2015.

A Tower Hamlets Council spokesperson said: “The council initially plans to visit premises in an advisory role to educate lettings agents about their legal requirements under this new legislation. We will also be on hand to answer any queries that letting agents may have.

“These educational visits will be in addition to a series of meetings recently carried out with letting agents to check on their compliance with additional legislation. This required all agents to belong to a consumer redress scheme.”

“Once letting agents have been advised, any breaches of the law will be treated very seriously and could lead to enforcement action being taken against them”.

Letting agents who failed to comply could face a fine of up to £5,000 per breach.  The Act says that particular attention is drawn to the consequences of a breach of the duty to publish a list of fees on an agent’s website.

While all eligible letting agents in Hackney already signed up to government-backed redress schemes for tenants and landlords, Hackney Council will carry out similar measures to ensure the new requirements met by contacting and visiting the letting agents in the borough.

Most consumers welcome the initiatives. Purnima Panagoda, 30, a landlord who owns a flat in Mile End said: “As a landlord, I definitely support to have more visibility on the various fees charged by the letting agents and know clearly what we are paying for.”

Aaron Carbray, 45, a chef who rents a flat in Shoreditch, said: “It is already very difficult and expensive to find and rent a flat here. It will be a good thing to have more transparency in terms of the miscellaneous fees that come with the rent.”

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