In a landmark ruling, the advertising watchdog has today ruled that all letting agents must clearly disclose what their fees are when they market rental properties.
The ruling is against Your Move, but also specifically implicates Rightmove, ARLA and the Property Ombudsman.
However, it has far-reaching implications for all advertising media and portals, both sets of ombudsmen, for all the membership bodies, and for all letting agents.
The ruling comes as pressure is piled on the whole topic of letting agents’ fees – which were specifically banned in Scotland last year and have become the focus of a Shelter campaign in England.
It also comes on top of yesterday’s Which? report, naming Your Move as one of four agents in possible breach of the law over disclosing fees. The other agents accused were Martin & Co, Foxtons and Barnard Marcus.
This morning, the Advertising Standards Authority’s ruling against Your Move makes it clear that agents will be breaking the rules if they do not spell out exactly what compulsory fees they charge when letting a property.
Your Move found itself in trouble for advertising on Rightmove. The seemingly innocuous advert, for a semi in Surbiton, did not mention a fee.
Guy Parker, chief executive of the ASA, said: “Hidden fees are not only unfair, they hit those who are struggling hardest. Our ruling today makes clear that letting agents need to get their houses in order and treat potential tenants fairly.
“Renting a property is a significant commitment. And for those who are new to the rental market, like students, navigating it can be particularly difficult.
“That’s why the ASA is clamping down on letting agents who hide fees.
“Today’s ruling makes clear that agents must include all compulsory fees and charges in their quoted prices. If the fees cannot be calculated in advance then the agent must make clear that fees have been excluded, and provide enough information for consumers to establish how fees are calculated.
“It’s now our priority to make sure agents across the sector bring their advertising into line.”
In the case, an unnamed complainant challenged whether Your Move adverts on Rightmove were misleading because they did not include the admin charge. Your Move told the advertising body that information about its charge was available on its own website.
The firm, part of LSL, said that no agent listing properties on Rightmove gave admin charges within the listings themselves.
This practice, it argued, was in line with both ARLA and the Property Ombudsman’s codes.
Furthermore, admin charges levied by Your Move varied from region to region, and depended on individual circumstances.
Your Move told the ASA that it acknowledged that fees were material information that would be relevant in the consumer’s decision to rent. However, it did not believe that people arranging viewings because of listings seen on Rightmove were at the stage of deciding to rent. Your Move did not therefore believe that the admin fee was material information that needed to be made known at this point.
For this reason, information on the admin fee was made known to the consumer later on, but before they had decided to rent.
The ASA did not agree with this, saying that the decision to arrange viewings was itself a “transactional decision” and likely to be affected by knowing about the existence and costs of admin fees.
It said that ads should include information about fees, because it was material for consumers when searching Rightmove for a rental property.
The ASA ruled that Your Move’s adverts breached the advertising code on two grounds, concerning prices and misleading advertising. The ads must not appear again without clearly stating the fee information.
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Comments
Like the two bush presidents having unfinished business in the middle east, the second bush trumping up WMD claims against Hussain. There IS unfinished business going right back to the inception of NALS. The common link in the Lettings war against Agents is PBK who was party to the NALS affair and ever since has been on a personal mission to regulate the lettings industry. So convincing is the hype and propaganda that even the BBC failed itself yesterday (Moneybox Live) by claiming that Christopher Hamer is THE Property Ombudsman as opposed to being a bloke who works for a company called The Property Ombudsman.
The point is that MPs, Shelter, Which, the ASA and the redress scheme supplier (tpo) are all claiming wrong doings in the industry that simply do not exist. Agents work for the landlord not the tenant it is not their duty to explain their fees to the whole world ahead of a tenancy but it is reasonable to explain to an interested applicant the cost of moving into a property of properties they might be interested in.
The motor industry is not required to quote me the cost of the road fund licence for my car, it is not required to point out the cost of each tyre, bulb, oil or insurance, there is an assumption that if I want a particular car I will either ask or I am not concerned with the cost.
Bitch an moan about Ian potter not doing anything if you like, you are wrong! the reason why the letting industry is in the GOOD shape that it is in is because the standards that he and others have put into place over the last 20 years.
Until PBK and Hamer set about destroying the good work of NAEA and ARLA both were respected organisations and in my opinion the best way to fight the contivances that are going on is to rejoin ARLA, rejoin NAEA as appropriate and support both bodies in their support of you.
Will agents have to advertise their sales commission rates in wanted adverts?
Will holiday firms now have to disclose the cost of suncream and airport parking in their adverts?
I would be very surprised if ARLA did comment without first seeking Counsels opinion for many reasons.
This is a Landmark case affecting 1000s of agents. Any response MUST be considered, informed and legally sound.
Next, should we advertise conveyancing costs with every house sale? Or surveyors, removals, dispersements?
It is of course utter nonsense and diverts from the real darker issues mentioned below.
I wonder who will be next? Has the ASA the resources to check every agent? I struggled to find ONE who complied.
Not sure what Your Move has done to deserve this onslaught from the regulators. Frankly, they are one of the better firms for compliance - same with Foxtons and in fairness most corporates
It seems to me that watchdogs are going for easy targets egged on by Which? and Shelter over petty issues rather the myriad of rogue agents using clients money to subsidise cashflow and lack of bank facility.
The problem agents aren't those with ARLA, TPOS accreditations - they are the ones without any and with no CMP or PI insurance,
AND before anyone says "We have been trading for 200 years without a problem" - so had Woolworths. In fact I know of a local agent established in 1930 with a great reputation who has just gone under taking clients for more than a few quid.
A lot of media we use have limited space for descriptions at the best of times, so by the time we've added details of fees, energy ratings, and anything else required of us, there'll barely be enough room to put in any information about the property which the applicant may actually want to know!
http://conversation.which.co.uk/consumer-rights/letting-agents-fees-transparency-foxtons-your-move-barnard-marcus-martin-and-co-your-move/
Here is the link to the conversation on Which's website just in case anyone would like to comment.
I read an interesting article Property Drum about the way in which the Scottish agents are dealing with their recent regulation of fees. It seems they are telling their landlords that they will have to increase their commission, but put the rents up to counter balance the financial impact on the landlord. I'm guessing if fees are abolished here, we will see the rents increase even more!
no potential tenant is interested in an agents website so whether it says anything about their fees or not is irrelevant. It's rightmove et al where tenants look and should be informed about fees. This looks like great news for the potential tenant and great news for those low or no fee online agents, who seems to offer the same service and referencing services to landlords. High street agents are finally going to be shown up for what they are - expensive! It's time for a business model change.
I am sure there it is just a matter of coincidence that Valerie Bannister (Head of Property Management at Your Move) is also the Vice President at ARLA.
I guess that is why we have had no comment
I agree Dave. What has happened to ARLA? Ian Potter says...... nothing...... again. Maybe they should appoint someone with a back bone and watch the memebrs flood back
Come on ARLA!!
Yet again another silence. What is going on? I remember when ARLA used to actually be an Association now it is just a law to it self.
Something has to change. What is the point of fighting for regulation when you have no comment. Everyone else has had there moment. I along with many other fellows are loosing faith and are looking for hope in other organised organisations.
I agree that the silence from the regulatory bodies is typically deafening but in response to ASNA's comment below about whether "ASA has any authority unless backed up by the OFT" - read the OFT report on the industry posted in this mag on 15 Feb where it clearly states that whilst not pushing for regulation (and who is ?!) it does want the lettings industry to clean up its act. Fine, but it's the bottom of the pool at the slime level which needs cleaning up -not the likes of the top-end companies dragged through the mud by ASA et al.
Bods from both ARLA and UKALA were questioned about exactly this issue by MPs in parliament this week, which you can watch here:
http://www.parliamentlive.tv/Main/Player.aspx?meetingId=12721
The view seemed to be that there are certain fees which could be shared upfront, and some that are more variable. Although I'm not sure the MPs were completely convinced.
Surely at the end of the day most people are concentrating on the houses to let rather than the small print when they're looking online - they'll ask about the cost when they answer the ad.
We do need ARLA to tell us what they think about this, or at least whether or not they are talking to ASA, OFT, Ombudsman about it. Does OFT matter any more now that Ombudsman seems to have had a parting of the ways with them, and we are to remove their logo from our marketing material? Crazy.
No comment from Arla again.
I am beginning to think they do not really exist.
The industry needs transparency and a fee offered needs to be the fee charged and not additional to hidden add ons -
But in the same note authorities needn't apply stupidity. How can a portal know what terms an agent is going to charge one week from a change in their model another week.
I think the powers that be need sack Micky Mouse and look at what is reasonably fair and expected and what isn't.
As soon as we receive an enquiry from a potential tenant we email them our full terms and conditions, which includes all fees chargeable.
Certainly it is not fair to have a potential tenant viewing properties without knowing what the cost implications will be.
Does the ASA actually have any authority here? I don't think so unless the OFT back it up.
I already insert the admin fee and check out fee on the holding deposit receipt form. Jobs a goodun!
We have a specific page on our web site for tenants which explains the procedure for renting a property including our fees etc. It would be difficult to quote fees for each specific property as it would depend on the tenants circumstances - whether they require a guarantor, whether they have a pet etc. When tenants contact us for a viewing we advise them of the fees they will have to pay dependant on their circumstances.
As with most ASA rulings, so long as there is a note on the advert to state that "application fees will apply", I don't see a need to start stating actual fees all over the property advert.
If Rightmove and other portals added a standard note to their existing footnote at the bottom of each property advert, that "agent fees may apply - contact the agent for details", that would save us all a lot of time in adding notes to every property we advertise.