Has Rightmove got letting fees disclaimer wrong?

Popular property website Rightmove has added disclaimers to all home rental adverts after letting agents were carpeted by the Advertising Standards Authority (ASA).

The move follows a decision by the ASA which said that just showing the rents for a property and not letting charges in adverts was misleading to consumers and broke advertising industry rules.

The advertising watchdog says that potential tenants must be told of any other fees which may be charged.

Their announcement followed a complaint from a concerned tenant who was not informed of additional administration fees by letting firm Your Move when renting a home.

Until now, Rightmove has stopped letting agents from showing fees in adverts, but this has changed.

Industry experts say that this is a tricky situation for Rightmove because no one is sure whether their new rules will placate the ASA.

Advertising issues

Rightmove has highlighted the recent ASA decision and is advising letting agents who are advertising that all non-optional tenant fees and charges should be clearly quoted.

The firm also points out that the new rules only apply to properties advertised in England, Wales and Northern Ireland.

Rightmove is urging letting agents to take appropriate advice to make sure that they comply with the ruling and whether they need to change their charging model.

The letting industry was caught flat-footed by the ASA ruling and, with the timescale for compliance short, there are fears that other major players in the industry may face action for misleading property ads.

Other major issues for letting agents to comply with the ruling is how they show their fees when they vary according to the tenant and the property and how to word disclaimers as they will distract attention away from the property.

One idea being put forward is that the agent should just show one fee for all of its properties but there are fears that this may lead to a price cutting war.

Flawed fee model

Critics also highlight the fact that if a letting agent does use a single fee than many tenants face being charged higher fees as a result.

The situation looks like it is going to run for some time and Caroline Kenny, of the national landlords association UKALA, says it isn’t feasible for letting agents to put their fees into adverts.

She said transparency and fairness should underpin all dealings between landlords, letting agents and tenants and added: “That is why we actively promote declaring all fees clearly at the earliest practical stage. In theory, this should include detailing all fees and charges in all advertisements, but in practice this simply isn’t feasible for most agents.”

However, the real issue at stake is not finding work rounds for the ASA ruling, but how the ruling has exposed a flawed letting agent business model based on flexible fees.


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