Letting Fees MUST be disclosed in advertising as of Nov 1st 2013

Letting Fees MUST be disclosed in advertising as of Nov 1st 2013

12:13 PM, 10th September 2013, About 11 years ago 14

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Many of you will be aware of a ruling made by the Advertising Standards Authority (ASA) in March this year following a tenant complaint concerning letting fees. This meant that changes had to be made to the way letting agents and private landlords advertise, and as a regulator, the ASA has the power to enforce the rulings.

The Property Ombudsman led a working group to discuss the ruling and negotiate its implementation with the Committee of Advertising Practice (CAP), which writes the Advertising Codes applied by the ASA. Letting Fees MUST be disclosed in advertising as of Nov 1st 2013

The discussions began immediately after the ruling and CAP has released new guidance today for agents and private landlords to adhere to. The guidance notes can be downloaded by completing the form below this article.

CAP has agreed to an 8-week period of grace to allow agents and landlords forewarning to make the changes outlined in the guidance so they are compliant from 1st November 2013 onwards.

Given that the ASA ruling had to be implemented and the practical limitations facing portals advertising rental properties online, this is the most practical outcome possible in the circumstances.

The CAP guidance includes:

  • A background to the role and responsibilities of the ASA and CAP, and the ruling that led to the changes
  • Guidance on how to interpret the ruling
  • Timelines for implementation
  • Points of contact for further information/support

Gerry Fitzjohn, Chief Operating Officer of The Property Ombudsman Service said “I recognise the impact this ruling has on letting agents and the industry as a whole and hope today’s CAP guidance provides some clarity on this issue.”

Please post comments below the download request form.

CAP Guidance Notes - Download Request Form


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DC

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12:02 PM, 16th September 2013, About 11 years ago

Reply to the comment left by "Ray Davison" at "16/09/2013 - 11:47":

Hi Ray, I can't think of any agents my way that wouldn't charge a finders fee and isn't Adam's £100 fee just that, a finders fee? Plus he charges the £5 advert fee? So £105 and then you have to sort out the referencing.

As I said, I prefer to leave all of that for the agent to do, which in Adam's case would then be an £89 referencing fee with the £100 finders fee waived, so £94 including the advert fee.

If I have misunderstood this then perhaps Adam ought to clarify exactly what National Lettings do actually charge.

Ray Davison

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12:14 PM, 16th September 2013, About 11 years ago

Reply to the comment left by "DC " at "16/09/2013 - 12:02":

Yes I understand a finders fee but why pretend that you can advertise for £5 when without further spend it will never achieve anything for you as no prospect details will be passed on.

I think your last comment is the relevant one though - it is all too complicated and that is what the new rules are attempting to prevent. Adding further complication in an attempt to circumvent the ruling is not really the intent as to achieve transparency you really need simplification as well. If you elect to carry out the referencing yourself Adam will still need to display any costs you will be imposing within his advert.

DC

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12:20 PM, 16th September 2013, About 11 years ago

Reply to the comment left by "Ray Davison" at "16/09/2013 - 12:14":

Yes, I see what you are saying, the headline fee of £5 isn't the whole picture.

Adam, you will have to sort this I'm afraid!!

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21:34 PM, 16th September 2013, About 11 years ago

Sorry guys, I'm sure Mark didn't intend for this thread to be all about my business model but as you've asked .......

THE SMALL PRINT - FEES

Our £5 charge for Rightmove advertising is a loss leader. When we find a tenant for you we offer three options as follows:-

1) Pay a tenant find fee of £100 when we refer a tenant who agrees to rent your property. We do not recommend this option as it does not include formal referencing.

2) Refer tenants back to National-Lettings for formal referencing. We charge referencing fees of £89 inclusive of VAT per tenant or guarantor. Our tenant find fee of £100 is waived when your tenants instruct and pay National-Lettings for formal referencing. This option is not available if your property is in Scotland as Scottish law does not allow premiums to be charged to tenants.

3) You pay the formal referencing fees of £89 per tenant/guarantor to National-Lettings on behalf of your tenants and in return we will waive the £100 tenant find fee.

Most landlords in England and Wales prefer option 2) i.e. for their tenants to pay for formal referencing. This keeps your costs and risks down to the absolute minimum. However, you are perfectly entitled to pay our formal referencing charges if you prefer to do that.

Getting tenants to pay for formal referencing is also a sign of commitment that they will rent your property. Tenants are usually familiar with the requirement to pay referencing fees to letting agents and generally see £89 as being extremely competitive in comparison to fees charged by other agencies.

Rogue tenants often target landlords who do not charge fees on the basis they have nothing to lose and in the hope that the landlords referencing processes are sub-standard.

Other terms of business:-

National-Lettings aims to ensure that all adverts comply with the Committee of Advertising Practice (CAP) Compliance team rules effective 1st November 2013. This requires all letting agents to disclose fees payable by tenants within advertisements.
You are required to notify us of any fees, other than formal referencing fees charged by National-Lettings, and to indemnify National-Lettings of any liability in respect of not disclosing fees in accordance with the Committee of Advertising Practice (CAP) Compliance team rules effective 1st November 2013.
National-Lettings does not guarantee to let your property.
Unless otherwise agreed in writing, advertising is for a maximum period of 30 days or until the property is let, whichever is the shorter period.
National-Lettings reserve the right to refuse to accept advertising without providing a reason.
National-Lettings reserve the right to cancel advertising without providing a reason.
In the event of advertising being cancelled or refused by National-Lettings the advertising fees you have paid will be refunded to you within seven days of written request which should be served by email to mark@national-lettings.co.uk
National-Lettings is a member of The Property Ombudsman redress scheme. If you have a complaint it should be addressed to mark@national-lettings.co.uk in the first instance. We will respond to your complaint within 30 days. We are allowed up to 8 weeks to resolve any complaints. After that period, if you are not satisfied with our response you may escalate your complaint to The Property Ombudsman Service.

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