Shelter has long had a negative view on lettings agents fees. This is something I have commented on previously on this blog. Shelter would like the position in England to be the same as Scotland, where agency fees are banned. However, I have tended toward a more nuanced position which illustrates that agency fees are appropriate where they are for a specific service and provide a key element of risk balancing, without which, rents would probably be driven up further. Where I do agree with Shelter is my concern that these fees are not always made sufficiently clear to tenants.

The OFT has also said this in a report published last month. It criticised the lettings industry for not making fees sufficiently clear in advance of contracts being signed. Other reports [PDF] have criticised the industry for its lack of standardisation of fee structures which makes it hard for a meaningful comparison to be made between firms by consumers, both landlords and tenants.

Now the Advertising Standards Agency has now weighed in with an Adjudication in relation to one of the bigger agents in the business and their use of the largest online property advertising site.

As with any advertising aimed at consumers there is a restriction on the advertising offered by Lettings Agents and it is subject to the codes of practice published by the ASA. They can also deal with complaints about them.

Complaint

The agent involved, YourMove, in this case had advertised a property for rent on the online property portal, Rightmove. This is a common method of advertising. A complaint was made that the advert was misleading because it did not specify all of YourMove’s charges and fees to tenants. Therefore the sum quoted for the rent was not the total price that would be paid.

YourMove’s Response

YourMove responded that the advert indicated that there were fees to be paid and contained a link to their website where such charges were specified. They stated that they followed industry practice and codes of conduct (which they do). They also pointed out that the RightMove site was used to find suitable properties to rent and so the agent’s fees were not a material concern for most consumers at that time. Finally, it was pointed out that some of the fees were contingent on other factors and so could not be expressly quoted.

ASA Ruling

The ASA has upheld the complaint against YourMove. YourMove have been ordered to make clear in all adverts where there are further non-optional fees that will be charged and how they are calculated so that a consumer can ascertain themselves from the advert what those fees are likely to be.

Comment

At one level this is a surprise but when you consider their general approach to these issues and some of the adjudications made against airlines, credit card companies, and others it is consistent with their aims. Clearly the ASA will take the same line with all other lettings agent’s advertising. This adjudication will probably do more than any other single thing to change the way charges are set out in the industry as agents will now have to place their charges into adverts alongside rental prices.

Advice to Agents

All agents should carefully consider the effects of this ruling on their advertising. They should amend all their advertising to ensue that their fees are actually visible on those ads directly. It would certainly be helpful if the main portals amended their systems so that these fees could be entered centrally and would then be replicated on all the ads from that agency.