Letting agent fees: CTSI and TPO campaign In this feature l tenants fees l consultation l compliance Fee display law: agents beware A national campaign on lettings fees targets more agents in new areas in 2017. gerry Fitzjohn outlines The Property Ombudsman scheme and CTSIs plans D espite the government announcing plans to ban agents from charging tenants upfront lettings fees, a campaign launched by CTSI and The Property Ombudsman (TPO) scheme will go on. Barely a month after CTSI and TPO launched their first joint drive designed to tackle letting agents who break the law by failing to display their fees the Chancellor announced government plans to outlaw the charges in Novembers Autumn Statement. The government will now need to consult on the issue, and draft and pass new regulations. In the meantime, the obligations on English and Welsh lettings agents to display fees along with redress and Client Money Protection (CMP)* scheme membership details remain. Furthermore, any future ban of tenant fees will not prevent letting agents from charging fees to landlords, so TPOs joint campaign with CTSI to ensure agents display their fees in accordance with the law will continue. The first phase of the campaign focused on agents operating in Swansea and Dorset. Contacted by TPO, they were asked to supply photographic evidence to demonstrate they were complying with thelaw by displaying their fees both in the branch and on their company websites. Any agent neglecting to display the figures will be referred to local trading standards teams for further investigation, which could result in the agent facing a fine of up to 5,000. To that end, TPO and CTSI will continue with the joint campaign, andwill target more agents in different locations during 2017. Our Consumer Codes Approval Scheme-approved Codes of Practice clearly state thatagents must display their fees in accordance with the 2015 Consumer Rights Act. There can be no excuses. TPO member agents must abide by the law. Letting fees are under the spotlight and firms would be well advised to get their house in order to ensure they comply with the law as it stands. Strong ties with CtSI Any agent neglecting to display their fees will be referred to local trading standards teams for further investigation, which could result in the agent facing a fine of up to 5,000 TPO is incredibly proud of its strong ties with CTSI and local tradingstandards officers, and wants its teams to lead from the front. Leon Livermore, CTSIs chief executive, said: Trading standards officers are focused on looking for agents that fail to display their fees and will take serious action against those that dont comply with the law. Agents that are signed up to The Property Ombudsmans CTSI-approved Lettings Code HavE YoU FINED aN agENt FoR of Practice are committed to delivering the FaILINg to DISPLaY ItS FEES? highest levels of consumer protection, and we Were keen for local trading standards teams fully support TPOs efforts to improve industry to rally behind this campaign and share compliance. examples where agents have failed to Once the government has confirmed how display their fees and been fined that CTSI it intends to prevent tenant fees from being and TPO can publish to deter agents from charged, TPO will amend its Lettings Code breaking the law. of Practice to reflect the practical application Wed also like to hear from anyone who has of the new regulations. However, until that come across examples of firms following the point, TPO will continue to work with CTSI law effectively, in their branches and online, to use as best practice. Please email any and local trading standards teams to ensure examples to pressoffice@tsi.org.uk our member agents comply with the law by displaying both their landlord and tenant fees. Property ombudsman Katrine Sporle added: As ombudsman, my primary focus is that agents should be clear and transparent in their dealings with consumers. Agents that display their letting fees demonstrate to consumers that they are operating to a high standard, complying with the law and TPOs Lettings Code of Practice, and are open in theircommunication. How should agents display their fees? TPO guidance issued to letting agents advises them to ensure that: The description of each fee is sufficient to enable the person who is liable to pay it to understand the service or cost that is covered by the fee, or the purpose for which it is imposed All fees, charges and/or penalties are quoted inclusive of VAT Fees, charges and/or penalties are displayed prominently at all premises at which the agent deals face to face with potential and actual tenants and landlords the test of whether they are displayed correctly is likely to be whether the consumer had to ask to see the fees list Fees, charges and/or penalties are displayed in full on the agents website Surcharges and hidden fees are not used Whether the charge is per property or per tenant is clearly stated They explain how fees that cannot be determined in advance will becalculated There is no duplication of charges between tenants and landlords although it is acceptable to split charges between those parties, as longas this is clearly explained in relation to the total cost of the specific service Some of the industrys trade bodies have also produced useful guides and templates to help agents comply with the law. One such organisation the Association of Residential Letting Agents (ARLA) has produced a convenient fee template for agents to use. Useful information: TPOs membership terms require that all agents are compliant with the law and the schemes Lettings Code of Practice, which clearly states inSection 1m that all agents must display their fees The Chancellor announced government plans to remove letting agents ability to charge fees in the Autumn Statement, on 23November Find out more about TPO and CTSIs joint campaign here, and follow TPO on Twitter via @TPOmb Footnotes: *The Client Money Protection scheme is an insurance product agents can take out to protect consumers from fraud. Under the Consumer Rights Act 2015, all agents must let consumers know if they have CMP cover or not. (A government working party is currently looking at whether to make CMP compulsory.) tHE PRoPERtY omBUDSmaN TPO helps more than 16,000 consumers every year and plays a crucial role by protecting consumers from poor service and unfair practices while working closely with property professionals to raise standards in the industry. TPO represents more than 85 per cent of all lettings agents in the UK and about 95 per cent of all UK sales agents. There are more than 34,000 agents registered with the UKs largest property redress scheme, which operates accredited Sales and Lettings Codes of Practice approved by the Consumer Codes Approval Scheme (CCAS). As a genuine alternative to the small claims courts, TPO offers a free, fair and impartial redress to consumers who have been unable to resolve a dispute with a registered agent. TPO is not a regulator, but the Ombudsmans powers mean that a member agent can be held to account for their actions, thanks to the schemes Codes of Practice. The Codes are crucial when reviewing complaints, as they underpin the way each case is investigated to ensure a consistent and fair approach for all parties. Credits Gerry Fitzjohn is board chairman of The Property Ombudsman. Images: rassco / Shutterstock To share this page, in the toolbar click on You might also like Matt Allwrights column, Letting away withit, January 2017 edition of TS Review.