The Association of Residential Letting Agents (ARLA) has called for better regulation in the private rental sector to stop rogue landlords charging excessive tenant fees.
ARLA’s recent report on tenant fees found that 74% of ARLA Licensed agents charge tenants no more than £250 in tenant fees. Overall, among the members surveyed, the report found ARLA Licensed agents charge £213 on average in tenant fees to cover the lettings process.
David Cox, managing director of ARLA, said that tenant fees are needed: “Tenant fees cover the cost of essential items during the lettings agreement process such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal. All of these items cost the agent money to carry out, and in fact, provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items.
“Of course, there are some landlords and agents that do take advantage of the cost of tenant fees. This is where better regulation is needed in the private rental sector to ensure consumers are not taken advantage of. We want to see tenants paying a fair price for the service they receive. Regulated agents don’t charge excessive fees. The results of our survey show that on average ARLA Licensed agents charge a reasonable £213 in tenant fees; which we see as a fair price.”
Among ARLA Licensed members, the services which tenants are most likely to be charged for are reference checks, with almost all branches charging tenants (98%), followed by charges for the tenancy agreement (69%) and then fees for tenancy renewal (65%). Nearly 6 out 10 (57%) ARLA Licensed agents stated they charged a flat fee that includes all of these services for tenants, rather than charge individually itemised and calculated tenant fees.
Cox added: “Renting a property is a big financial commitment and tenants should be made aware of what exactly they are being charged for and what they are getting for their money. ARLA supports openness and transparency when it comes to fees.”