First advice on letting agent fees due out this month
The lettings industry looks set to have to comply with the ruling that agents must show their charges to tenants in all adverts, including listings on portals within weeks – even though official guidance is still being written.
The Committee of Advertising Practice’s timescale for “full compliance” is early 2014, but it expects to issue interim guidance by the end of this month.
The Office of Fair Trading is also drafting guidance, likely to go further than simply covering adverts, and this would form definitive new rules early next year. If the OFT does not issue its advice until early 2014, it would mean that it will have taken virtually a year from deciding that letting agents must disclose their fees to working out how this can be done.
A letter, seen by Letting Agent Today, has been sent by CAP to the main industry representatives – both sets of ombudsman services, the RICS, ARLA, UKALA, NALS, and the two main landlord bodies.
Earlier this year, the Advertising Standards Authority ruled against a Your Move advert for a rental property that showed the rent, but not charges to tenants.
The CAP letter updates the industry bodies on how the property portals will cope with the requirement, following a meeting with Rightmove. Zoopla is apparently happy to follow Rightmove’s lead, the letter notes.
The letter explains: “Currently, their system does not allow agents to insert detailed cost information about fees and, for complicated technical reasons, there seems to be little prospect of swift software changes.
“However, Rightmove proposed an interim solution whereby a hyperlinked ‘fees’ statement next to the rental price could be added to the full page ads. This would link to a pop-up page containing generic information about the range of fees that could be charged.
“Rightmove said they could relatively easily implement that change while they independently worked on a full system upgrade, for launch early next year, that would allow agents full flexibility to insert bespoke information about their fees.
“That could work in a similar way to the interim solution but of course the information consumers would see in the pop-up would be more accurate and more complete. Agencies would be provided with forms that would allow them (or their partners) to upload accurate information about fees.
“The interim solution suggested by Rightmove would not apply to those results listings consumers first see on performing a search. Rather, the pop-up information about fees would feature on the ‘property details’ page consumers click through to. Rightmove could introduce much the same system for its mobile platforms, which form an increasingly large part of its business.”
The letter continues: “In a sense, therefore, the guidance as proposed for portal listings is softer than that currently proposed for listings on agents’ own sites. However, it must be stressed that this solution is temporary; as you’re probably aware, the OFT is also in the process of drafting guidance to the lettings industry, so adding an ‘interim phase’ would allow us to synchronise our timescale for full compliance with the OFT’s formal publication of its guidance (due early 2014).
“The OFTs guidance is likely to be more wide-ranging than ours in that it has the remit to cover the breadth of trading practice, not just advertising. It is likely, however, that the OFT’s guidance will have explicit conditions about fees and advertising and will, therefore, replace our guidance.
“To ensure we pursue a joined-up approach, we had a constructive knowledge-sharing meeting with the OFT in June and will continue to liaise with it closely in advance of publication of our respective guidance.”
The letter, from CAP compliance executive Rupa Shah, concludes by asking the recipients to express any views by August 9.
Article courtesy of LettingAgentToday