The deadline for compliance to the new advertising
regulations for letting agents is November 1 and the advertising
watchdog along with consumer organisation Which? will be paying
close attention its implementation.
Agents have been informed they must "prominently" display the
fees and must precisely follow the new rules. Now the
Advertising Standards Authority has suggested that deposits should
be shown in adverts, alongside a clear explanation of how they are
calculated.
Although deposits are categorised as separate from non-optional
fees and therefore not part of the new guidance, the ASA say that
landlords and letting agents are required to provide all material
information to enable average consumers to make informed
decisions.
"Material information is likely to include more than just the
non-optional fees and charges, but also other financial information
such as refundable deposits. We therefore encourage landlords and
agents to include a note of the deposit and how it is calculated in
their advertising."
The ASA believe the new guidelines will help prospective tenants
make more informed choices and avoid being misled.
"Non-optional fees, such as administration fees, charges for
inventories and reference checks, can add a significant amount to
the cost of moving into a property. It's unfair if these costs are
not clearly stated up-front.
The changes mean that non-optional fees have to be made clear on
agent's websites, and in all other advertising media. Any
fees that can be calculated in advance will have to be included
with the quoted asking rent e.g. £1500pcm + £150 admin fee per
tenant.
Any non-optional fees that cannot be calculated in advance must
also be clearly stated in advertisements so consumers will be able
to establish how further charges will be calculated.
Where there is limited advertising space, in a tweet or
sponsored search for example, advertisers will be required to
provide information on additional fees through a prominent
statement on either the website, a link or via a pop-up.
ASA chief executive Guy Parker said: "Renting is a big financial
commitment and it's simply not fair to hide extra charges. This
practice hits tenants in the pocket at a time when they need every
penny they've got.
"But this isn't just an important win for them. It will also
benefit letting agents and private landlords because their
customers will trust them more when they're up-front about
non-optional fees."
The ASA warned: "Agents should comply with both the letter and
the spirit of the ruling: giving a fee a different name, grouping
fees together and calling them something else, using generic
statements like 'see terms and conditions', hiding the key
information in small print or otherwise attempting to circumvent
the spirit of the ruling, will not help achieve compliance."
Which? executive director Richard Lloyd said: "Our investigation
this year exposed letting agents acting unlawfully by not
disclosing fees up-front, so we are pleased to see the ASA
announcing new rules.
"Renting is now the only housing option for millions so we'll be
watching carefully to ensure all agents and websites are fully
transparent about their fees."
Ian Potter, managing director of ARLA, said: "ARLA has, for a
long time, said that all letting agents should be clear and upfront
about the fees they charge, and the services associated with those
fees.
"We've worked closely with CAP and the ASA on the development of
these guidelines, so the deadline and associated requirements will
not come as a surprise to our members.
"As the private rental sector continues to grow, transparency
around fees is vital to ensuring the letting industry is trusted by
landlords and tenants alike. For this reason, transparency is part
of our code of conduct and any member that doesn't adhere faces
investigation by either the relevant ombudsman or disciplinary
action by ARLA."
