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CAB report highlights unfair charges to tenants by letting agents

An item on the BBC news site has alerted me to a new report from the Citizens Advice Bureau on fees to tenants by letting agents. The report comments that many letting agents are regularly making unjustified charges to tenants for "tasks that are no more than the routine business of letting and managing a property" (and sometimes for items they are also charging to landlords). For example, the report states:

"Charges included a non-returnable holding deposit, a deposit administration charge, a reference check charge, an administration fee, a check-in inventory charge, a check-out inventory charge, and a tenancy renewal fee."

Of these, I would comment that one inventory charge is fair if the landlord pays the other (ie one paying check in and the other paying check out) provided the fees are reasonable and reflect the actual cost of the work. Reference checks are probably also reasonable, if they reflect the actual cost of referencing. However, the holding deposit should be credited to the rent or damage deposit if the tenant rents the property, and 'renewal fees' have long been considered unfair by many.

The CAB is right to draw attention to these fees. Often tenants feel that they have no choice but to pay as they fear that otherwise they will lose their home. Many agents act responsibly and only charge for what is fair, but there are a large number who do not. The CAB report comments "charges often bear little or no relation to the cost of the work involved and in some cases letting agents appear to make them up as they go along."

The report also mentions the change in attitude of many agents towards tenants before and after they have signed up. This is no doubt true in many cases - to get a flavour of what tenants think of agents you only need to do a search on 'Foxtons' in twitter.

Hopefully things will improve if the agent licensing plans put forward by the government in their recent report go ahead.

Full post as published by The Landlord Law Blog on May 21, 2009 (boomark / email).