The weather feels slightly warmer than Londoners’ recent responses to the long-awaited Housing White Paper. “The best thing I can say about it is that it will have almost no impact on London” tweeted Greater London Assembly member, Tom Copley. Giles Peaker, the housing solicitor, put it still more succinctly “Meh”. There’s nothing more about that herein.
Mostly, we’re focused on renters’ rights in relation to the responsibilities of agencies. And we’re asking you to share your views on ending tenant’s liability for paying agents’ fees, so that our response to DCLG consultation is as robust as possible. Last, but by no means least, could ‘Right To Build’ release you from the rent trap?
Share Your Experience of Agents’ Fees?
You’ll remember how, in his Autumn statement last year, the Chancellor of the Exchequer, Philip Hammond, confirmed that
“In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees. So I can announce today that we will ban fees to tenants as soon as possible.”
Today, the much-heralded ‘fees ban’ is still subject to consultation. Although no dates have yet been announced, the consultation is expected to open in March and close in April. Professional bodies representing landlords and lettings agents have been making their case for months already. David Cox, managing director of the Association of Residential Letting Agents, described the proposed change to the law as “a draconian measure”. He also said that he thinks it’s “fair and reasonable” for agents to charge hundreds of pounds for basic administrative tasks. Perhaps it would be less unfair if the cost of these fees was wholly the responsibility landlords, but as it stands, lettings agencies charge both landlords and tenants for their services.
Renters’ Rights London regularly receive requests for advice from renters faced with additional and often large bills for all sorts of things, from providing an inventory, to renewal of a contract. We have a body of evidence on how hard agency fees bite Londoners, then. But to help us prepare the most robust response possible to this consultation, we’re keen to know more about your experiences of letting agency fees.
To this end, we’re fact-finding via our website. Whether you rent your place via an agency now or did so in the past, we’ll be most grateful if you’ll share your story. You can remain anonymous, if you prefer, but Renters’ Rights London won’t share your personal details with anyone, anyway. Please be assured; the details of your story stay with us.
Please tell us about your experience of letting agents’ fees?
How to Unwind Without a Bed?
An email from a most unhappy renter in Balham explained that, when she viewed the room which she now rents in a shared house, there was a bed in it. That bed belonged to the previous occupant and he took it with him when he moved out. The agent who showed our correspondent around assured her that the bed would be replaced. Moreover, the rental agreement described the room as ‘fully furnished’ so she signed a 12 month AST without hesitation.
However, nearly ten weeks later, this woman still has no bed. She sleeps on a mattress on the floor. The agent has now told her that it’s not his job to provide her with a bed. Oddly, ‘fully furnished’ does not automatically mean there must be a bed, unless a bed is specifically mentioned in the inventory.
“I am a 29 year old working professional and being forced to sleep on the floor” she told us. “It’s humiliating.”
This renter’s instinct was to withhold a portion of her rent in protest. Fortunately, she contacted Renters’ Rights London before she did that. She cannot legally withhold rent, unfortunately. However, she does have some rights under Consumer Protection (Amendment) Regulations 2014 (which amended Consumer Protection from Unfair Trading Regulations 2008). The Regulations prohibit ‘unfair’ commercial practices. The prohibited practices are:
- giving misleading information (a ‘misleading action’)
- withholding necessary information (a ‘misleading omission’)
- using coercion, harassment or undue influence (‘aggressive practice’) and
- failing to follow accepted trading practice (lack of ‘professional diligence’).
A commercial practice that is specifically untruthful is obviously a misleading action. When information is presented in such a way as to deceive, even if it is factually correct, if that information causes the consumer to do something s/he would not otherwise have done, that’s misleading, too. As this renter was told that a bed would be provided and it has not been included, she says that she has been misled.
It would also be misleading if important information were to be omitted or hidden. Liability for misleading someone by omission cannot be avoided by claiming no knowledge of the problem. For example, where a renter is told by a landlord that a boiler has had the legally required safety check, but then, cannot produce the certificate, it would be appropriate for the renter to insist on another check being carried out.
Where the tenancy was signed up to because of a misleading action or aggressive practice, the tenant can terminate the contract and be released from any obligations under it. This is ‘the right to unwind’.
The tenant has 90 days from the start date to inform the landlord (or landlord’s agent) that s/he wants to reject the contract. It is strongly advisable to do so in writing. There is no requirement for the tenant to show that s/he has suffered any loss, nor that the landlord (or agent) acted dishonestly or negligently.
If the tenant informs the landlord (or landlord’s agent) that they want to unwind the tenancy within the first month of the tenancy start date the tenant is entitled to a full refund of the money they have paid out. That’s not actually relevant to the renter in Balham. She moved in at the start of December but she is still well within the 90 day time limit so a refund could still be given, but any refund will be calculated by the court.
When a person signs a tenancy agreement as a result of a misleading action or aggressive practice, that person also has the right to pursue damages if they have:
- incurred a financial loss
- suffered alarm, distress, physical inconvenience or discomfort
There is no 90-day time limit for claiming the right to damages. The Limitation Act 1980 period of six years applies. Damages are assessed according to the degree of loss or suffering experienced, but damages are limited to those losses reasonably foreseeable at the start of the tenancy.
Because the right to unwind a contract is a very recent right, it’s hard to be sure of how successful our renter would be in practice. The landlord or agent could potentially dispute the right to unwind the contract. If that were to happen and the court did not accept our renter’s claim, the tenancy would not be unwound, leaving the renter with ongoing liability to pay the rent and possibly, with a claim for damages made against her by the landlord or agency.
A landlord or her/his agent has a defence to a claim for damages if s/he took all reasonable precautions and exercised ‘due diligence’ to avoid the prohibited practice occurring. It is also a defence to show that the prohibited practice was due to some kind of mistake or accident, or was because the landlord (or agent) reasonably relied on information supplied by someone else.
Our renter has a choice, though. She found her room through an agent so it should be possible to make a complaint to the relevant redress scheme. The agency must belong to one of the government-approved schemes (more details later herein).
The scheme ensures that tenants (and landlords) have a procedure through which a complaint against an agency can be lodged and considered, independently. Agents are under a duty to advertise which scheme they have joined, at their offices and usually, display a badge on their websites, too. It’s the duty of the Council to ensure that all agencies in the borough are members of one of the schemes. For the renter in Balham, though, the respective timescales involved mean that she must choose either to unwind or to make a complaint to the redress scheme.
Of course, this renter could ask the agent for the landlord’s contact details, to discuss this unhappy situation directly. Even though the landlord employs an agency to manage the property, the renter is still entitled to know the landlord’s contact details, within 21 days of a written request for the landlord’s contact details. This right laid out s1 of the Landlord and Tenant Act 1985. Similarly, tenants also have a right to obtain the names and addresses of the directors, if the landlord is a company. The local authority (the Council) can take action against an agent failing to provide the landlord’s contact details.
Your Rights If You Rent Via An Agency
If you rent your home via a letting agent, your contract is with the landlord, the owner of the property. Though the landlord employs an agency to manage the property, you are still entitled to know the landlord’s contact details, within 21 days of a written request for that information. Similarly, you have a right to obtain the names and addresses of the directors, if the landlord is a company.
The local authority (the Council) can take action against an agent failing to provide the landlord’s contact details. The Council also has a duty to ensure that all lettings agencies in the borough are members of one of the government-approved redress schemes. The three government-backed schemes are
Since 2015, the Consumer Rights Act has obliged letting agents to display a comprehensive list of their charges and fees on their websites and in their offices, where they must also display the badge of whichever redress scheme they have joined. Failure to comply with the law can lead to the agent being fined up to £5000.
Examples of complaints that can be made against a lettings agency or property management service include:
- avoidable delays
- failure to follow procedures to which the agent subscribes
- not explaining things
- poor service or incompetence
- use of hidden fees.
The redress scheme can require the agent to provide redress through:
- the provision of an apology or explanation
- compensation up to £25,000
- some other action deemed in the interest of the complainant, as decided by the scheme
The redress scheme will investigate any complaint against one of their members, free of charge. Fuller details of what types of complaint and the procedure for dealing with them, are laid out on the website of each scheme (links above). A complaint won’t normally be investigated until the agent has been given a reasonable opportunity (up to eight weeks) to resolve it.
However, as you are entitled to know the landlord’s contact details, if you have a problem in your home, you might prefer to contact the landlord directly, to address the situation.
‘What Else Is There?’ The Right To Build
If you’ve read The Rent Trap by Rosie Walker & Samir Jeraj (2016, Pluto Press), you’ll remember Chapter Eight, What Else Is There? which briefly explains co-operative housing (p.146) and community land trusts (p.150).
As part of the Housing and Planning Act 2016, local authorities are required to help find land for those who have an interest in building their own homes. This is done through the Right to Build register; a list of people or groups who would like to self build that Councils have to keep. Local authorities in England are supposed to make enough serviced plots available to meet the demand (assessed by the number registering for the Right to Build).
Those applying as a group will get the chance to take on what is known as a co-housing project or community self build. The council will try to provide a plot for the group to build several homes, or flats. Here in London, the high price and short supply of land will make this extremely difficult to achieve here but could it be possible?
If exercising The Right To Build is of interest to you and you’d like to meet others in your borough to form a group, get in touch. As soon as we collect more than three names in a single borough, we’ll organize a meet up with more information for you.