Tenant Fees and Charges Hit the Headlines

This week Shelter published a report on their investigation into letting agent fees.

The report found that letting agency fees could be pushing renters into debt or cutting back on food and heating and as a consequence, the charity has called for an end to letting agency fees to renters in England.

So fees traditionally charged to tenants to set up a tenancy, including ‘administration’ fees, ‘holding’ fees, credit check fees and ‘check-in’ fees could soon be charged to landlords. Shelter suggests that asking landlords to cover the costs of setting up a tenancy is a fairer way of doing business. They say “it is landlords, not renters, who have the power to choose one agency over another, to negotiate the fees charged and to terminate a contract”.

The NLA agrees that essentially, a landlord using an agent has agreed to pay for their services, including the establishment of a tenancy and a variety of due diligence activity, which is intended to reduce the risk of the tenancy failing. And from their point of view it is unhelpful for prospective tenants to be faced with unpredictable or excessive fees for accessing their property as it reduces the prospects of finding a tenant.

However, there is good reason for some initial costs to be incurred by a prospective tenant before they have committed to a property. Before agreeing a tenancy it is important that an agent is able to verify that an applicant is who they purport to be and that the information they have provided is truthful and accurate. In the NLA’s view it is appropriate that the applicant contributes towards the cost of this early verification as it provides a safeguard against speculative attempts to rent property and attempts at deception. It also means that the landlord is not left to cover the cost of applicants withdrawing from the process once costs have been incurred.

Of course it is vitally important that all costs are made clear before any commitment to proceed is made and that no further undisclosed fees materialise once the tenancy is agreed. Further to this it is fair that a proportionate charge is paid to cover the cost of the work completed for the tenant.

To discuss the upfront fees that are charged to tenants please do not hesitate to contact us on 01536 267755.