If you are operating in an office premises it is the law that you have your fees to vendors, landlords and tenants displayed in a prominent position under Section 83 of the Consumer Rights Act 2015. The same information should legally be displayed on the agent’s website.
The notices must contain:
- A description of each fee which is sufficient to allow a customer to understand what work the fee covers;
- For tenant fees, an explanation of whether the fee is per tenant or per property;
- A statement of whether the agent is a member of a client money protection scheme; and
- Where the agent is required to be a member of a redress scheme, confirmation that they are a member of a redress scheme, and the name of the scheme.
This legislation is policed by your local Trading Standards Office, and over the past 6 months estate and letting agents have been targeted by a UK team of TSOs, employed to visit agency offices, to trawl through agents’ websites and to ensure that compliance to this legislation is enforced. The maximum fine for breaching section 83 of the Consumer Rights Act 2015 is £5,000, but the drafting of the legislation has left considerable doubt over what the appropriate level of fine is, and in what circumstances a local authority may issue more than one fine to the same agent.
The Government’s view found in the guidance notice issued during the passage of the Consumer Rights Bill, states that £5,000 should be the normal file, but the Act itself does not specify this and many TSO’s will argue it is just a starting point. As the guidance was issued before the Bill became law its validity is also open to doubt, so non-compliance could be a £5,000 fine or £5,000 for each section of the legislation you are breaking!
Whereas the Act states “only one penalty under this section may be imposed on the same agent in respect of the same breach” there is doubt about where one breach ends and the next begins. Recent appeal decisions demonstrate that there no consensus about how to properly calculate fines under section 83, even amongst the judges:
Example: First-tier Tribunal appeal Up My Street Ltd v London Borough of Camden [2017] where the judge declined to uphold a fine of £5,000 on the basis that “the maximum fine should be reserved for the ‘very worst’ case, rather than the ordinary case”. However, the judge did uphold Camden’s separate fine for failing to publish full details of agents’ landlord fees (reduced to £4,500 on appeal), £3,000 for failing to publish details of the agents’ client money protection scheme and £3,000 for failing to publish details of the agents’ redress scheme membership.
It is our advice that you ensure your fees are displayed correctly, both in all of your office premises and on your website. Please remember that fees must be displayed inclusive of VAT. You are able to place +VAT sums inside brackets after the inclusive fee is written, you just need to ensure that the customer totally understands that they have to pay the VAT element, so make it very clear indeed.
It is also worth noting that the Trading Standards Officers may work on a weekend, because many are contracted for this job, so ensure your weekend staff understand the law and that they pass on any information from a TSO who has visited the office. If you fail to comply with their requests, it will not be in your favour when fines are imposed, and you cannot use the excuse that the staff member forgot to pass on the information!
