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MP’s vote on tenant fees a wasted opportunity

From Property Talk Live on May 20, 2014

A hasty vote on letting agents’ fees took place in parliament last week, pushed through by Ed Miliband following Labour’s recent proposals to make large-scale reforms to the private rental sector.

MPs were asked to vote on banning fees charged by agents to tenants in an amendment to the Consumer Rights Bill. The majority of MPs, 281 out of 509 (a margin of 53) voted against the motion.
Before the vote, Paul Weller, managing director of the UK’s largest independently owned letting specialist Leaders, argued that the fees letting agents charge are necessary to ensure a quality and trustworthy service for both landlords and tenants and that it is fair for tenants to pay some fees for the service they receive, provided all fees are clear, transparent, proportionate and there are no hidden extras.

“It is the job of the agent to protect the interests of both landlords and tenants,” said Mr Weller. “We don’t only act for the landlord, we must also make the time and effort to fully understand our tenant’s requirements and ensure we help them secure the right property.

“We must make sure the property is safe and legally compliant, with the appropriate gas, electrical and fire safety checks and records in place, and protect our tenant’s rights by ensuring all documentation and legal paperwork signed by them is correct and meets their specific requirements. A significant number of tenants wish to make amendments to their tenancy agreement to suit their personal requirements and we are able to accommodate this because their fees cover the cost of the work and resources required.

“When purchasing a property this would be undertaken by the purchaser’s solicitor, who makes a charge, but in lettings this is done by the agent and the administration fee tenants pay covers this cost.”

Responding to the result of the vote, Mr Weller said, “Fortunately common sense has prevailed but yesterday’s vote was a wasted opportunity. The vote should have been on banning all unregulated agents from practising. This would have enabled Parliament to tackle the problems at the heart of our industry in one motion. 40% of letting agents are not members of a professional body so it is clear that self-regulation is not enough. What is needed is legislation that ensures that – as a minimum requirement – all letting agents are qualified, have client money protection and operate to an agreed code of conduct for the whole industry.

“The issues go much further than agents charging fees to tenants. We need to rid the industry of rogue agents who charge extortionate fees, who do not protect their clients’ money and in some cases abuse it, who put their tenants’ lives at risk in unsafe properties and who provide a sub-standard service with little regard for the law. The best action politicians can take to protect the UK’s 3.8 million tenants and rising in the private rented sector is to properly regulate letting agents, we have been calling for this for decades.

“The fact that anyone can set themselves up as a letting agent, with no experience, understanding of the market or knowledge of the law, can charge excessive fees and do what they like with their clients’ money, is totally unacceptable.”

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Source: Property Talk Live