Watchdog Orders Letting Agents To Show Fees In Adverts

Date Published 06 March 2013

In a landmark ruling, the advertising watchdog has today ruled that all letting agents must clearly disclose what their fees are when they market rental properties.

The ruling is against Your Move, but also specifically implicates Rightmove, ARLA and the Property Ombudsman.

However, it has far-reaching implications for all advertising media and portals, both sets of ombudsmen, for all the membership bodies, and for all letting agents.

The ruling comes as pressure is piled on the whole topic of letting agents’ fees – which were specifically banned in Scotland last year and have become the focus of a Shelter campaign in England.

It also comes on top of yesterday’s Which? report, naming Your Move as one of four agents in possible breach of the law over disclosing fees. The other agents accused were Martin & Co, Foxtons and Barnard Marcus.

This morning, the Advertising Standards Authority’s ruling against Your Move makes it clear that agents will be breaking the rules if they do not spell out exactly what compulsory fees they charge when letting a property.

Your Move found itself in trouble for advertising on Rightmove (see the image). The seemingly innocuous advert, for a semi in Surbiton, did not mention a fee.

Guy Parker, chief executive of the ASA, said: `Hidden fees are not only unfair, they hit those who are struggling hardest. Our ruling today makes clear that letting agents need to get their houses in order and treat potential tenants fairly.

`Renting a property is a significant commitment. And for those who are new to the rental market, like students, navigating it can be particularly difficult.

`That’s why the ASA is clamping down on letting agents who hide fees.

`Today’s ruling makes clear that agents must include all compulsory fees and charges in their quoted prices. If the fees cannot be calculated in advance then the agent must make clear that fees have been excluded, and provide enough information for consumers to establish how fees are calculated.

`It’s now our priority to make sure agents across the sector bring their advertising into line.`

In the case, an unnamed complainant challenged whether Your Move adverts on Rightmove were misleading because they did not include the admin charge. Your Move told the advertising body that information about its charge was available on its own website.

The firm, part of LSL, said that no agent listing properties on Rightmove gave admin charges within the listings themselves.

This practice, it argued, was in line with both ARLA and the Property Ombudsman’s codes.

Furthermore, admin charges levied by Your Move varied from region to region, and depended on individual circumstances.

Your Move told the ASA that it acknowledged that fees were material information that would be relevant in the consumer’s decision to rent. However, it did not believe that people arranging viewings because of listings seen on Rightmove were at the stage of deciding to rent. Your Move did not therefore believe that the admin fee was material information that needed to be made known at this point.

For this reason, information on the admin fee was made known to the consumer later on, but before they had decided to rent.

The ASA did not agree with this, saying that the decision to arrange viewings was itself a `transactional decision` and likely to be affected by knowing about the existence and costs of admin fees.

It said that ads should include information about fees, because it was material for consumers when searching Rightmove for a rental property.

The ASA ruled that Your Move’s adverts breached the advertising code on two grounds, concerning prices and misleading advertising. The ads must not appear again without clearly stating the fee information