Lettings News,Tenant Fees Ban

Calls for Incentives for Agents to Implement Fees Ban Ahead of Introduction

Rose Jinks - November 7, 2018

The Government has suggested that it could incentivise letting agents to stop charging fees to tenants ahead of the introduction of the fees ban, which is expected in spring next year.

On Monday, it rejected calls for extra regulations to enforce the ban, but did say that it would consider proposals that would prevent agents and landlords from possessing multiple holding deposits from different sets of tenants for the same rental property.

Speaking during the committee stage of the reading of the Tenant Fees Bill in the House of Lords, the Government’s housing spokesperson, Lord Bourne, said that advice was being taken on the legality of agents and landlords taking multiple deposits. He believes that this isn’t fair and could be a breach of contract.

Peers called for regulations, rather than guidance, on the use of holding deposits, to make it clear when they could be retained and to define what a default fee is.

Baroness Grender highlighted the case of a Bristol-based letting agent, Be Streets Ahead, which she said had refused to refund a holding deposit to a group of friends who had withdrawn their application, as one of them had a brain tumour.

She insisted that regulations should allow exemptions for health issues, so that a holding deposit could be returned.

She also warned that agents are becoming “more aggressive” on administration fees, and called for incentives for firms to start implementing the fees ban before its official introduction.

Lord Bourne said that the Government is keen to avoid regulations, and rejected suggestions from Lord Best that a delay in implementation, so that clear regulations could be agreed, may be “a price worth paying”.

Instead, peers agreed to be more closely involved in developing guidance.

Lord Bourne also revealed that the Government was engaging with Zoopla, Rightmove and Purplebricks to raise consumer awareness of the fees ban.

Meanwhile, Baroness Hayter took the debate as an opportunity to criticise the Government for increasing the coverage needed for Client Money Protection providers to £200m, with no cap on liabilities.

She noted that this excluded the Royal Institution of Chartered Surveyors and Propertymark, as their limit is £5m.