Extra Costs Causing Hardship for Tenants
June 12, 2009
Tenants renting flats and houses in England have recently been faced with a rash of charges that is cutting into the money they have allotted for their expenses. One charity in England has labelled these extra charges by the letting agents as unjust and excessive.
In a recent report, Citizens Advice says that administration fees and reference checks could amount to an extra £600 for tenants. The charges to the tenants are not relative to the actual costs for these services. This survey was conducted by the charity based on the tenants that did go to them for help. The report was released a week after the government announced that it was creating a private registry of landlords in England and the creation of an independent regulator to oversee landlords.
Citizens Advice would like to see a ban placed on the additional charges for tenants, which are in excess of the normal monthly rental costs. These charges, according to the charity, are part of the normal business of letting property and should not be passed on to the tenants.
“The charges,” according to David Harker, chief executive officer for the charity, “can be a huge barrier for people on low and average incomes, and in some cases the letting agents appear to make them up as they go along.”
In England, anyone can become a letting agent under the current regulations. They can impose various kinds of charges on tenants, such as:
- non-returnable deposit on the property
- a deposit for the administration charges that may result
- an administration fee for the preparation of the rental documents
- check-in and check-out inventory charges
- charges for checking references that can range from £10 to £275
- charges for renewing the tenancy agreement, which can range from £12 to £200
The report from Citizens Advice also claimed that many letting agents were double charging tenants for the same service. This part of the report came from the survey of 1300 tenants who visited the charity’s website between August and November of 2008. Fifty-one of the branches of the charity based in England and Wales also conducted a review of 424 letting agents during this same time period.
According to Ian Potter, the operations manager of the Association of Rental Agents (Arla), this organization has a code of practice for its members. This code advises the agents to make sure that the charges they impose on their tenants are reasonable and that the tenants understand the charges.
Potter would like to see all letting agents in the country licensed and has actively campaigned to bring such a scheme to fruition. In this way the letting agents would be professional and subject to rules and regulations.
He says, “The letting agreement is, by its nature, a complex transaction centred on the emotive subject of people’s homes. A key element of Arla’s licensing campaign to professionalize the sector is to increase the consumer understanding of this complex process.“
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