The government’s ban on tenant fees is good for business and will strengthen the relationship between landlords and tenants, according to one letting agent based in Scotland.
DJ Alexander Ltd, one of the largest family-run property management businesses north of the border, believes that charging tenants administration fees is both unnecessary and bad for business.
The company, headed up by brothers David and John Alexander, believes that the experience of the Scottish market means that Scotland could be the model for future letting in the rest of the UK.
The regulations in the forthcoming Tenants Fees Bill in England and Wales have been in place in Scotland since 2012; the no fault grounds for eviction notices no longer exist in Scotland; and the Scottish government recently introduced much greater security of tenure for tenants.
David Alexander, joint managing director of Apropos by DJ Alexander Ltd, said: “In many ways Scotland has led the way in improving the rights of tenants and changing the relationship between landlord and tenant. Too often this relationship has been confrontational and divisive with each side pitted against the other. Rather than resolve any disputes or problems the attitudes and the regulations seem to be established to dispose of any complaint by a tenant rather than address it.”
“The Tenants Fees Bill simply rights a flawed piece of legislation that allowed unwarranted and unfair charges to develop under the camouflage of ‘administration expenses’ often with little or no explanation of what these were for or why they were being applied. With many letting agents operating a business model where such charges account for a quarter to a third of income it is clear that they were not motivated to end these charges, reduce their levels, or to have them examined in too much detail.”
John Alexander believes that the ban on the fees will result in higher fees for landlords, which will concern many buy-to-let investors.
He commented: “When these charges were ended in 2012, and they were never as substantial a part of the Scottish market as they have been in England and Wales, there were doom-mongers who predicted the end of the lettings market. But this did not happen, the market adapted, landlords were charged more, but the best agents and the best landlords adapted and realised that this was fairer for the tenant and, in the long term, created a better relationship between the two.”
“Equally the ending of the no faults ground for eviction notices and introducing much greater security of tenure for tenants was feared by some in the property market as a sign of them losing control. On the contrary it gives agents, landlords and tenants the opportunity to develop a relationship built on trust, on fairness, and on developing a long-term relationship to their mutual benefit.”