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New advertising rules for letting agents and private landlords

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last updated: 26 May 2016 report a problem

new advertising rules for letting agents and private landlords

Many tenants will be aware by now of the new advertising rules for letting agents and private landlords set by the ASA (Advertising Standards Authority) but there seems to be some confusion about what letting agents must do, so we thought it would be a good idea to clarify it for everyone.

All letting agents and private landlords must, when advertising a property for rent, display their non optional fees in a prominent way and this rule came into effect on 1st November 2013.  The purpose of the ruling was that the ASA identified a requirement in the letting industry for more transparency in pricing.

What this means

Any online advertising including letting agents’ own websites must include those fees that the agencies charge as standard.  In one recent case the ASA upheld a complaint made against Your Move Ltd as a result of its rental property advertisements on Rightmove which broke the new advertising rules by not displaying their compulsory admin charge, something the ASA deemed to be misleading.

The ASA was quick to point out that it wasn’t just Your Move Ltd that the new rules applies to but any business that advertised in the letting sector.

Here is a short summary of what letting agents must do in order to comply with the new ruling when advertising on their websites or any other media such as newsletters, posters or leaflets:

Since standard (non optional) fees can be calculated in advance, these should be displayed on the advertisement alongside the rental price. For example, if there is a fixed administration fee of £200 per tenant and the rent is £750 pcm an easy way to include this in advertising would be “Rent – £750 pcm + £200 administration free per tenant”.

If there are fees which letting agents cannot calculate in advance and they are not included in the quoted price of rental, it must be made clear on advertisements that other fees will be charged with sufficient information for prospective tenants to easily understand how any extra charges will be calculated.

For letting agents that use Twitter, the ASA suggests that letting agents should provide additional fee information via a link, statement displayed prominently on their website or a pop-up; since the amount of characters that can be used in a tweet is limited.

Naturally the ultimate goal is to assist prospective tenants to make informed decisions and choices based on transparent information that is not misleading.

Part of the role of the ASA is to promote trust in advertising and working with its sister organisation CAP (Committee of Advertising Practice), they are available to assist letting agents in ensuring their advertisements are correct.  ARLA (Association of Residential Letting Agents) and the TPO (The Property Ombudsman) are just two of the organisations that the ASA has worked with to inform members about the new advertising rules and letters have been sent to private landlords and letting agents letting them know about the new advertising rules.

In addition the ASA is actively encouraging private landlords and letting agents who are uncertain about the changes they need to make to their advertising to contact them.  The CAP website is also a great source of information and assistance.

So what are non optional fees?

CAP outlines these fees as follows:

  • Reference fees including credit checks, guarantors, bank and previous landlords etc.
  • Application fees
  • Preparing tenancy agreements
  • Inventory fees

The above all form part of the non optional administration fee that letting agents charge.

Other information that should be included depending on available space is whether these fees are charged per property or per tenant.

Certainly private landlords and letting agents are now being scrutinised by the ASA and CAP and should advertisers not comply with the new rules, they will take appropriate actions against them.

The Office of Fair Trading is in consultation currently as to trading practices in the lettings sector that could breach the new legislation, whether the advertiser is a business or an individual.

The more transparent letting agents and private landlords are, the better it is for prospective tenants because not only will tenants get a fair deal but it will also enhance the reputation of the lettings industry and generally be good for business.

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