Government Targets Rip-Off Fees Charged By Property Agents

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Letting and property management agents are under fire from the government for rip-off fees and unfair dealings with landlords and tenants.

Communities Secretary Sajid Javid has published a series of calls for evidence to support his plans to regulate the industry.

His moves follow a move to ban letting agents from charging tenants upfront fees to rent a home.

First, Javid revealed new laws are coming that demand letting agents join a supervisory body to ensure they maintain minimum standards and undergo training.

The measure also calls for landlords to sign up with an ombudsman, so tenants have an independent arbitrator to resolve their complaints.

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Property court and tax incentives

The secretary also wants to start a new property court to hear complaints from private tenants about their landlords and letting agents.

Javid also suggested Chancellor Phillip Hammond may give an incentive to landlords offering 12-month tenancies in his Autumn Budget 2017.

Now, he has turned his attention to property management agents who charge sky-high fees for run-of-the-mill repairs.

Launching a second call for evidence, the secretary spoke of leaseholders charged 10 times the going rate to have a new fire escape fitted at an apartment block, only to see the £30,000 job landed by the freeholder’s brother

Another agent charged a landlord £500 for repairing a shower cubicle door, while agents quoted a leaseholder almost £5,000 to transfer a parking space to another leaseholder.

Giving power to consumers

Javid says up to £1.4 billion a year is spent on unnecessary leasehold charges and over-priced repairs.

“This is supposed to be the age of the empowered consumer – yet in property management, we’re still living in the past,” said the secretary.

“We are showing our determination to give power back to consumers, so they have the service they expect and deserve, as part of my drive to deliver transparency and fairness for the growing number of renters and leaseholders.

“Our proposed changes to regulate the industry will give landlords, renters and leaseholders the confidence they need to know that their agents must comply with the rules.”

In a third consultation, the secretary is considering an overhaul of the property sales process by banning gazumping and stopping estate agents from earning referral fees from lawyers, builders and surveyors.

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