I recently came across an investigation conducted by Which? that looked into whether or not Estate Agents were breaking the law.

The essence of the investigation was that they claimed to have found that a number of Estate Agents:

"required a commitment or a holding deposit before the tenants could view a sample letting agreement.”

The implication being:

“demanding a financial commitment before tenants can view the terms and conditions could fall foul of consumer law by trapping tenants in contracts they haven’t had an opportunity to review.”

The other part of the investigation looked into Tenancy Agreements. According to the research Which? conducted they claimed that a selection of Agreements reviewed contained ‘vague’ language which prospective renters may not understand. To the extent they could be argued to be in breach of the Consumer Right Act 2015.

Whilst being in breach of the Consumer Act will be based on the facts of each individual case as per any legal case, the important part to note is the requirement of a financial commitment before prospective tenants are able to view the letting agreement to which they will be signing up to.

Whilst there is no legislation prohibiting such a requirement, it begs the question as to what the Estate Agents, that were subject to the investigation, consider to be good practice.

Either way, Estate Agents need to be aware of the above and any future tenant even more so, as they should not be forced to pay any money concerning the above nor held to ransom.

However, help and some clarification as to what Landlord’s and Estate Agent’s are able to charge prospective tenants for is on its way in the form of the Tennant Fees Act 2019.

The Tenant Fees Act will come into force on 1st June 2019 and at the centre of the new laws is a ban on tenant fees, including admin and agency fees. From 1st June, it will be illegal for landlords and agents to charge tenants for referencing, inventories and ‘admin’ fees.

The main changes to note are the following:

  • Limit tenancy deposits to five weeks’ rent
  • Limit holding deposits to one week’s rent
  • Ban any other payments (except contractual default penalties)
  • Fines of £5,000 for first offence (civil)
  • Fines of £30,000 for second offence (criminal)

If you have been affected in any way by similar circumstances or feel that you simply need some advice in relation to the legislation, or any other landlord or tenant matter please do not hesitate to contact us on 0207 936 6329 or alternatively via email on info@monangozzett.com

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