The Main Points
The essential point is that any tenant, when looking at a property advert, should be able to see from the advert the total cost of renting that property. That means that simply advertising the rent is not sufficient and all non-optional costs, fees, and charges that a tenant might have to pay must also be included. This might include the deposit, referencing fees, and charges for drawing up the agreement.
If space is genuinely heavily restricted then it is appropriate to use a phrase such as “deposit and fees apply” or similar. You should note that using the word “may”, as in “fees may apply”, is only acceptable if it is true. If all tenants, or the overwhelming majority, will have to pay an additional fee then writing “fees may apply” is not accurate and it should not be done.
Where a fee or charge cannot be readily ascertained then it is also acceptable to use the phrase “additional fees apply” or similar. Again the word “may” should only be used where there is a significant percentage of the prospective tenant who might have no fee to pay. Where a fee or charge can be set out in part this should always be done, so the phrase “£250 per tenant and further fees may apply” is better than simply saying that everything is to be looked at later.
Where a portal is not within the agent's control then it is accepted that fees cannot be displayed. However, most portals now provide a linkability to link to the fees page on the agent’s own website. The CMA is of the view that such a link needs to be a single click to a page displaying the relevant fees. Not a click to the homepage (or some other page) and then a further click to access a list of fees and charges. If the portal does provide a mechanism to show fees, either on the page or by way of a “pop-up” or similar system then it must be used. No such latitude applies on an agent's own website or another service which is wholly within its control.
All fees expressed for consumers, that is pretty much all tenants, must always be quoted as inclusive of VAT. You can add the phrase “inc VAT” to make that clear if you wish but no tenant should have to do the mathematics needed to work out what a fee is with the VAT added on.
Agents in breach of CAP guidance can find themselves subject to rulings by the ASA which are enforceable with criminal penalties. If their practice is found to be unfair trading which is misleading then they are also at risk of prosecution under the Consumer Protection From Unfair Trading Regulations (CPRs). Finally, where a tenant can show that they were subject to misleading advertising over fees they are entitled to take on the tenancy and make a civil claim (again under the CPRs) for the return of the money they paid as a result of the misleading advertising.
It is important that agency fees are shown with rent. It may be sensible to simplify fee structures to make it easier for these to be placed in advertising. A single fixed fee per applicant for example that embraces everything that is being done would be easier to advertise. And do not forget the VAT!
Anthony Gold Solicitors have substantial experience of advising on consumer matters for agents. With our broad experience of the letting and estate agency market and our knowledge of varied business models, we can provide practical solutions for most consumer concerns.
About the author:
David Smith is a partner at Anthony Gold Solicitors and a recognised expert in landlord and tenant law.
He can be reached by telephone on 020 7940 4060 or by email on firstname.lastname@example.org