Tenants need protection from feral letting agents

http://www.guardian.co.uk/commentisfree/2013/jan/16/tenants-protection-feral-letting-agents

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Landlords and tenants don't agree about much, but on one issue they are united: both really hate letting agents, while for their part, letting agents just don't care.

Census figures suggest that a combination of spiralling house prices, a rising population, a lack of housebuilding plus easy credit and tax advantages for landlords will force many young people to spend their lives renting privately.

Landlords engage letting agents to manage their property, but many services, like tenant referencing, inventories and "finding", are now sub-contracted to another growth area: self-proclaimed specialist firms that charge exorbitant fees for these services when they used to be free, or the agent charged the landlord.

Letting agents have used the resulting free time by inventing more cunning schemes to bamboozle renters and siphon money, such as denying tenants the opportunity to read the rental agreement until the actual day they move in, having been charged a non-returnable "holding fee". This is presumably to slip in some last-minute dodgy clauses and requirements, when already impoverished and desperate tenants are less likely to strike them out or refuse to sign, for fear of losing money.

Some letting agents refuse to name the true landlord on the rental agreement, substituting their own details, when tenants have a legal right to know who the landlord is. Housing professionals wonder about this habit, since it might complicate liability for repairs. Agents are also known to insert a clause forcing above-inflation rent rises, in certain cases every six months, fuelling the stratospheric rise in rents highlighted by Nicky Gavron at a recent London Assembly housing committee discussion on renting, at which private tenants groups urged the assembly to ban "bogus and opportunistic" letting agent fees

An inventive litany of fees paid by tenants is surely the worst of their many sins. Agents bill for references (often not pursued: I asked my former landlord) and "check-out" fees, charging renters for the post-occupancy inspection that benefits landlords and used to be a free-of-charge simple once-over. Letting agents are raking in money from every layer of the renting transaction. They encourage, or insist upon, short-term lets, benefiting financially from every new occupation, charging repeatedly for standard documents, usually issuing photocopied forms kept on file.

Politicians such as Labour's housing spokesman, Jack Dromey MP, who speak out about agents and their lack of professional status and fiendishly inventive fee "menus", usually advocate transparency, ignoring the fact that fees must already by law be transparent, but are nevertheless exorbitant and utterly unjustifiable.

Labour's recent statement on private renting ignored the letting-agent question, and regulation-averse Tories will not intervene. Labour's clearest signal that they will sidestep the problem is news that Jeremy Corbyn MP had no option but to raise an early day motion, proposing a formal complaints procedure and mandatory registration. He didn't mention fees, and has so far attracted just 35 signatures. At least they didn't form a committee. His move follows a case in his north London constituency last month, when a conman disappeared with up to £40,000 – the combined cash from 30 young flat-seekers who all handed over deposits of between £1,000 and £2,500 after signing tenancy agreements for a one-bedroom flat.

Scotland has a simple and robust solution to letting agent scams. Since 1984, all fees, or "premiums" other than a one-month deposit and six weeks' rent in advance, have been illegal. Tenants who do not know this, or who are bullied into paying by brazen agents, reclaim their money in court (reinforced by an excellent Shelter Scotland campaign). Most agents issue refunds before the case goes that far.

Landlords should cover their business costs, not burden already struggling tenants. Can you imagine supermarkets charging shoppers an entrance fee? I have used Scottish law to reclaim two sets of letting agent fees, and the agent concerned described made-up fees as "a game we agents play". When tenants have no choice but to cough up before they can move in, that "game" is called extortion.

In any case, the new online "portals" are doing a fine job of eradicating high-street letting agents. They act as matchmakers between tenants and landlords, and the best enable mutual referencing between rentier and renter.

But in the meantime, letting agents must be compelled to undergo professional training (especially in law, as many are ignorant) then to be licensed. Even the Association of Residential Letting Agents – their toothless regulatory professional body – is sympathetic. Tenants need protection from feral letting agents. Politicians take note – with at least 3.6m households renting privately across England and Wales, and the numbers set to rise with the sector increasingly, and controversially, used to house homeless people, low-income families and other vulnerable households who would previously have lived in social housing – it is also a vote winner.