Questions raised about letting agents in England and Wales

Consumer organization Which? recently undertook a mystery-shopping exercise at 20 letting agents in England and Wales and unearthed some disappointed results, including potential breaches of consumer law.

Five lettings agents required financial commitments before allowing customers to see contracts

One quarter of agents surveyed would only allow prospective tenants to view contracts once they had provided a financial commitment or a holding deposit and some of these further required a reference check to be undertaken (at the customer’s expense) before allowing them to see the contract.

Concerningly, three of these lettings agents were members of ARLA Propertymark.

Which? believes that the actions of these lettings agents could put them in breach of consumer law as they could make it difficult for tenants to shop around (due to the cost of doing so) and hence potentially limit their purchasing options and hence their ability to make an informed decision as to whether or not the contract in question is the right one for them.

A further lettings agent was prepared to provide a contract, but required the customer to visit their office to read it on-site. Which? believes that this behaviour could also be illegal by placing the customer under pressure to read the contract quickly, although in this instance the counter-argument could be made that it gave the customer the opportunity to ask questions and to clarify any points of confusion in the contract.

The wording of contracts was considered to be highly questionable

At this point it has to be recognized that drawing up legal documents is a complex process, even in the case of fairly standardized documents such as residential tenancy agreements.

It also has to be acknowledged that it can be extremely difficult to strike an appropriate balance between including enough detail without confusing the reader (given that the average customer at a lettings agent is unlikely to be a legal expert) and leaving sufficient flexibility to allow for different situations and changing circumstances (this will become especially relevant if the government does introduce three-year minimum tenancies).

This reality could give lettings agents some defence against the findings that some contracts were unreasonably vague. Sadly, Which? discovered that some contracts were not (just) vague but contained stipulations which were of questionable legality, for example some lettings agents required tenants to inform their lettings agent or landlord that they intended to switch utility tariffs and some even required the tenants to seek the permission of their lettings agent or landlord.

In law, tenants must be free to change utility supplier if they so wish. Again, however, Which? has not provided clarity as to why these clauses were put in place. It could simply be that lettings agents and landlords want to keep tabs on what is happening in the property so they know who to contact if they need to, e.g. if the tenant unexpectedly leaves the property without paying their rent.

Mark Burns is the managing director of Indlu estate agents in Manchester 

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