One of the leading figures in the PropTech world is warning that letting agents must not be tempted into charging illegal fees as demand for rental property mushrooms.
A busy rental market combined with unsettled economic conditions unfortunately increases the possibility of some agents charging tenants, warns the chief sales officer of automated payment platform PayProp, Neil Cobbold.
Unscrupulous agents running the risk of charging tenants should be aware that the issue is likely to be on the radar of the National Trading Standards Estate and Letting Agency Team, says Cobbold.
Those agents who wish to turn the booming market to their advantage, however, could instead develop closer links with clients and renters.
“Letting agencies have an opportunity to educate tenants about the fees ban so consumers aren’t taken advantage of by any firms attempting to charge prohibited payments” says Cobbold.
“During this challenging period for many people, it’s crucial that agents support tenants to help protect the long-term future of the rental sector for all parties.Taking this approach will further improve the public perception of letting agents and landlords, which is vital at a time when the industry is moving towards greater self-regulation.”
Cobbold says it’s also vital for renters to ensure they are up to speed with the rules set out by the Tenant Fees Act, as well as the redress options.
“Although industry-wide compliance with the fees ban continues to be very high, tenants should not assume all agencies are operating on a level playing field. If renters are aware of which fees they can and cannot be charged, as well as the maximum values of security and holding deposits, they can flag any issues early on to reduce the chances of being left out of pocket later.”
He suggests that while experienced tenants are likely to be aware of the ban on fees, those new or returning to the private rental sector could end up paying prohibited fees or higher deposits due to a lack of education.
Cobbold adds: ”Many agents and landlords will still be dealing with the financial effects of the pandemic, while the workload for many agencies will have increased significantly in recent weeks.
“Many renters across the country will have found it more difficult to pay rent in recent months and the winding down of the furlough scheme is likely to cause further uncertainty in the employment market.”
“However, property professionals should be aware that there are effective, legal and fair ways to ensure continued rental income during this period of lockdown easing, including automated invoice generation and arrears reminders.”
This post has originally been featured in Letting Agent Today.