Amnesty period announced over advertising watchdog’s ruling on fees

Letting agents can breathe a sigh of relief – for the time being – over the Advertising Standards Authority ruling that fees charged to tenants must be shown alongside rents whenever a rental property is marketed.

It has been agreed that there will be a moratorium until further details are thrashed out. That means the ASA will not act – as it did in the case of Your Move – to rule that adverts without agents’ fees break the Committee of Advertising Practice (CAP) code and are banned.

However, divisions are emerging within the lettings sector over the handling of the industry-wide issue.

The agreement on a moratorium was reached in a meeting between CAP and four industry bodies – the Property Ombudsman, ARLA, RICS and UKALA.

The meeting on the crucial issue for the industry did not include the other property ombudsman, Ombudsman Services, or NALS.

NALS confirmed they had not been invited to the meeting, which was held on March 22.

Despite the date of this meeting, no information was issued to agent members of the four bodies until last Friday – two weeks later.

NALS, meanwhile, along with major groups of estate agents, had earlier had its own meeting on the subject of the ASA ruling with the Office of Fair Trading – but did manage to issue a statement two working days later.

It is understood that the delay in publicising the upshot of the March 22 meeting was that the four bodies decided to put their statement to CAP – which apparently sat on it for a week.

Asked about the delay, Property Ombudsman Christopher Hamer said: “The time lapse was simply because we needed to agree the message amongst ourselves, which was quite easy, but we did say to CAP that we would let them comment – that meant a slowing down of the process across Easter.

“We want to work with CAP so that was important to keep them comfortable. The main message here is that no enforcement action will be taken until the CAP guidance is finalised and there is clarity for both agent and consumer.”

RICS and ARLA were also invited to comment on the time lag between the meeting and the release of the statement last Friday. RICS said the explanation was mundane, and involved getting the various parties to confirm the wording, which included discussions with the ASA.

ARLA did not get back to us, but Caroline Kenny, executive of UKALA, acknowledged: “This issue has been of great concern to letting agents as there has been no clear guidance issued since the ruling, giving rise to a great amount of uncertainty as to how it should be implemented in practice.”

She added: “We will continue to work hard with other industry bodies and CAP, aiming to ensure that this guidance will bring even more clarity to the situation.”

This is what letting agents who are members of the Property Ombudsman scheme received last Friday.

Dear Member

RE: ASA Ruling

The Property Ombudsman, Chris Hamer and I have led a formal group of industry representatives from ARLA, RICS and UKALA to discuss with the Committee of Advertising Practice (CAP), the formulation of guidance for agents on how to comply with the resent ASA rules on disclosure of non-optional fees payable by tenants.

The following press release explains the progress made. Some of you will [sic] received the same advice from your Trade Associations.

G Fitzjohn
Vice Chairman
TPO Board

Press Release

Representatives from TPO, ARLA, RICS and UKALA met with the Committee of Advertising Practice (CAP) on 22 March regarding the ASA ruling on disclosure of non-optional fees and charges to tenants. CAP is the body responsible for issuing guidance on how, in practical terms, the obligations now placed on letting agents by the ASA ruling can be met. The group welcomed CAP’s offer to the organisations attending the meeting for further involvement in the process of defining the best approach for guidance.

CAP had provided in advance of the meeting some draft guidance which will now be developed further in the light of the discussions and in consultation with the group. The industry representatives emphasised where further detail would be helpful, specifically with regard to how the role of internet portals might need to be brought within the scope of the guidance. CAP recognised the importance of providing clear and relevant advice including illustrative examples. CAP also appreciated the need to finalise this guidance promptly.

At the meeting it was determined that:

• Only fees relevant to the transactional decision should be disclosed more transparently. Precisely which fees this will apply to remains to be determined but we will continue to work with the CAP to provide further clarity in this regard.

• No enforcement action will be taken until the CAP guidance has been finalised and thereafter a period of grace of at least one month will apply to enable agents to develop their approach to compliance before enforcement commences.

The ASA ruling makes clear that consumers need more information up front about non-optional fees. It is highly likely therefore that agents will need to make changes to advertising across all forms of media to comply. However until the formal guidance is issued agents should ensure that their current advertisements do not disadvantage the consumer either by giving misleading information or by omitting material information. For the avoidance of doubt the ruling does not apply to fees payable by landlords to letting agents.

Article courtesy of Letting Agent Today

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