The trading standards team charged with policing lettings and estate agents is to investigate whether a new guideline on referral fees should apply to individual private landlords as well.
For the past two years the agency industry has been debating the merits and de-merits of referral fees; for some agents, they make up significant proportions of income, but they are relatively infrequently disclosed to tenants, landlords, buyers or sellers.
Last month the government welcomed a report by the National Trading Standards for Estate and Letting Agents Team, which recommended mandatory disclosure of such fees to ensure consumers felt confident in the services they received. It is expected that in 12 months time the government will decide whether to ban such referral fees outright, or make it obligatory by law for agents to disclose them.
At a Propertymark webinar yesterday James Munro - head of the NTSELAT - was asked whether such fees were ever enjoyed by individual landlords and, if so, whether they too would be subject to any eventual ruling.
Munro said he was so far unsure about the status of landlords, although he was aware some larger scale and professional landlords had favoured suppliers which were recommended to tenants - this often applies with utilities, for example.
“I’ll go away and have a look at this” Munro told webinar attendees. He then added: “Case law suggests that landlords - when acting in the role of landlords - were acting in the interest of their business. Therefore they may have to abide by CPRs [the Consumer Protection from Unfair Trading Regulations].”
In addition to proposals for government to make transparency of referral fees mandatory, last month’s NTSELAT report also called for a public awareness campaign and possible messaging to consumers that they should shop around rather than accept agents’ recommendations for other services.