Shelter letting away with it – should agents charge tenants?
There is a huge debate at the moment, with “Shelter letting away with it”, campaign making a campaign against it, but what will be the effects of NOT charging the tenant, what if all landlords decide to rent direct ?
There are debates going on around this subject on forums and social media platforms across the UK currently. Scotland has enforced an act made in 1984, preventing agents from charging fees, saying that agents are ripping tenants off, charging for services twice, and not providing good service. As the act was already in place but blatantly ignored by letting agents in Scotland, this has resulted in many tenants asking for full refunds of their fees paid from their letting agents, and now Wales is looking at creating a new act to create similar laws on agents there moving forward, but why?
Claims are being made that agents are “ripping off tenants”, and this may be the case in the minority, but it is certainly not something I have come across at all. As we research areas across the UK (as we open branches in different regions) we look at the charging structure of the competition in each patch, and the type of fees being charged to tenants, claimed by shelter of “over £540” in admin fees, as well as the deposit and advance rent, is something I have never seen, ever anywhere.
To make a profit, all letting agents generally charge roughly the same, if we don’t, we don’t get the business therefore our charges are generally on par with each other, but made up in different ways across the services we offer
But should we charge tenants at all, the landlord is our client isn’t he? Well yes he is, but we also have a duty of care to the tenant, to protect their interests. Anyone in lettings will tell you that it is quite often the landlords that are the hardest to manage out of the two sides of, landlords and tenants.
Many landlords are very good responsible diligent and educated and will do what is right recognising that their property is a business and therefore they need to spend money to keep the tenant happy and the income flowing, but not all landlords have this mindset or are not so well informed, especially with the influx of accidental landlords putting their properties onto the market.
Many times we have to guide the accidental or new landlord to making the right decision (or not making the wrong one) some example of scenarios we have had to talk landlords out of are: “That’s it I’m going down with a baseball bat to get them out” when tenants in arrears, “I’m not fixing that xyz, why should I/I can’t afford it/I don’t want to, etc”, when asked to maintain their properties another common one used by landlords wanting to get their tenants to pay or leave is “Its OK I will just turn the gas/elec off” and one odd one we had was where the landlord took the sofa out to “borrow” it for a family wedding when the tenant was sitting on it on a Friday evening in her dressing gown, which she called us in floods of tears about the following day.
Having a responsible agent in between the landlord and the tenants adds huge value to a tenant, and many of our tenants would not consider renting through a landlord direct, due to poor experience.
The problem with the job of landlord is that many see it as part time, something you do as well as work, so they do not invest time into their education on the matter and think, because they live next door, this gives them the tools that they need to be a landlord, but it does not, there is much more to being a landlord than just seeing to the repairs.
So should we charge tenants? Many tenants are happy to pay for that level of protection and to know that someone is their acting as a middle man, predominantly working for the landlord, but in doing so, ensuring he is honouring his obligations as a landlord. Many reputable agents will also offer 24 hours call monitoring, clear terms, processes and systems, so everyone is treated fairly. A good agent will have their tenancy agreements updated regularly to ensure that they are up to date, fair and complaint, and ensure gas and electric certs etc are in place for the tenant’s protection. A lot of onus is also put on an agent to always use certified contractors, to protect the tenant, something which many landlords do not do, choosing instead a mate or to do works themselves.
Of course it is important that any fees charged are fair and clear, that terms are issued so that the tenant knows what he will be charged before embarking on a let, but it think that given the protection that is afforded to the tenant, why should the landlord pay all the fees? If this ability to charge the tenant is removed, then the landlords will take that burden. This may result in many more deciding to rent direct to tenants… is that a good thing?
The government and the powers that be are better served insisting that all agents follow a code of practice like the ARLA code of conduct, and become licensed ensuring they have money protection and are qualified to do the job, that would get rid of the rogues anyway.
Sally Lawson is a Leading authority on Residential Lettings and Management in th UK, Sally has ran Lettings Branches since 1990, and let over 5000 properties during that time. She has also worked as a consultant and trainer to Letting agents nationwide. Sally is actively involved with ARLA (the association of residential letting agents) as a regional representative and Media Spokesperson for the group, and runs the rapidly expanding nationwide Concentric Lettings operation and Franchised network. www.SallyLawson.co.uk and www.concentriclettings.co.uk