Advice for landlords

Landlord accreditation

This scheme aims to improve and maintain standards across the Royal Borough’s private rented sector. There are several advantages to joining this scheme:

in-depth training on housing law
guidance on how to comply with the law and changes in legislation
details about the availability of grants for repairs, improvement, energy efficiency and bringing empty properties back into use
ability to use the accreditation logo on letters and correspondence
access to the rent deposit scheme

There are two key stages of the accreditation process:

The landlord attends a one-day development course. Topics could include landlord-tenant law, preliminary requirements, how to prevent problems occurring during a tenancy and information on housing benefits.
The landlord must agree to adhere to the Landlord Accreditation Scheme code of conduct. This is a simple process to follow and simply sets out in general terms what is expected of a competent and conscientious landlord.

In addition, a landlord should have no prosecution or similar action against them for breaches of certain requirements, including harassment, racial discrimination or offences concerning property conditions.

What happens next?

For more information, please contact the Environmental Health Housing Team on 020 7361 3002 or email [email protected].

Housing Association leasing scheme

The Housing Association Leasing Scheme (HALS) offers homeowners the opportunity to place their properties into a leasing scheme with a housing association. This scheme is supported by the Council and can offer:

full management of the property, with the housing association responsible for the day to day management
a guaranteed rent, even if the property is empty
replacement or repair of any damage to furniture, fixtures and fittings to the original standards

If you are interested in this scheme, please call us on 020 7361 3116 or email [email protected]

Private Licence Agreement (PLA) Scheme

The Council’s PLA scheme is a guaranteed rent scheme which offer homeowners the opportunity to place their self-contained properties into a leasing scheme with housing associations and private letting agents.

Whilst our preference is for accommodation within the Kensington and Chelsea borough boundary, realistically we cannot procure enough accommodation to meet demand, and are seeking accommodation in all areas of London.

All accommodation must have valid gas and electricity certification, and generally would be expected to reach category D in terms of Energy Performance.

Kensington and Chelsea currently has over 1,300 families placed in PLA accommodation throughout London. There is a high demand for flats and houses that can be utilised on a relatively long-term basis under the scheme.

For further information, please call one of the team to discuss how the scheme works, or alternatively email [email protected]

Chris Scott 020 7361 3116
James Akinwale 020 7361 3956
Stephanie Coleman / Abayomi Ajayi 020 7361 2328

Display of fees

Following a complaint to them the Advertising Standards Authority (ASA) issued guidance in November 2013 on how agents should clearly advertise their fees. In its Guidance for Lettings Professionals the Competition and Markets Authority (CMA) has provided further detail on how information on fees should be presented. Lastly, the Consumer Rights Bill is proposing a statutory duty for fees and charges to be displayed on business premises and websites.

What type of fees are covered?

Letting agents must make potential customers, both tenants and landlords, aware of all compulsory and upfront charges at the earliest opportunity. These are fees all customers will have to pay that are additional to the rent or service charge.
Not all agents pass on charges to clients but examples of these extra fees are reference checks, inventory lists, tenancy renewal fees, use of guarantors, permissions for pets and additional tenants.
You should also make reference to any fees that could be incurred at a later date such as charges for reminder letters if the tenant is late in paying the rent.

Can I pass on my administration fees?
Terms such as “Administration Fee” need to explained. The customer needs to know the nature and extent of the service covered by the term. With the correct information the customer will be able to understand the service and be able to make a decision on whether he or she wishes to go ahead with the contract.

Should I include information on refundable deposits?
Yes, for instance if you take holding or reservation deposits, where the property is taken off the market once a tenant has expressed interest, then you must include information on this. You must also explain under what circumstances the deposit, or part of it, may be not be refunded. We have separate guidance on holding deposits.

What should I do if the fee is variable?
If the fee cannot be calculated in advance because of, for example, an individual’s circumstances, then you must provide adequate information for customers to establish how the fee would be calculated.

For instance on reference checking or drawing up tenancy agreements you could quote the most frequent occurring charge with the proviso that for complex cases that take longer the extra will be charged at £X per hour.

When reviewing your fee structure, ask yourself:

Do the clients have all the financial information they need to work out the total cost?
Could they be misled as to the final charge?

Why must fees be made known?
Potential tenants should have all the information they need in the first instance to help them make an informed choice and to avoid being drawn into contracts they haven’t budgeted for. They will be happier clients in the long run.

If you give misleading information about fees or omit to tell a client everything, you may be in breach of the Consumer Protection from Unfair Trading Regulations 2008, for which you could be prosecuted. Also you would not be able to insist on payment under contact law.

What about VAT?
VAT should be included for fees aimed at both tenants and landlords. Not all landlords are able to reclaim VAT.

How should my fees be publicised?
We recommend you produce a list of fees for display on your business premises in a place where it can be easily seen. The list should be available on your website one click away from the details of the property. Your fees tariff should be included in any information you hand to a client.

It is advisable to put the date on the list or a valid duration period to avoid confusion should your fees change at a later date.

How can I get further advice?
If you require further information, clarification or advice on any of the above, please do not hesitate to contact the Trading Standards Service by telephone on 020 7361 3002 or via email at [email protected].

In offering the above advice this Authority wishes to make it clear that only the Courts can interpret the Law.

Holding deposits

In its Guidance for Lettings Professionals, the Competition and Markets Authority (CMA) has provided further detail on how information on these fees should be presented.

What is a holding deposit?
It is a fee paid by a potential tenant to reserve the property while negotiations are made with the landlord. The deposit is to cover potential losses by the landlord and to confirm a potential client’s interest in the property. Different terms have been used in the past and you need to be clear to tenants about what it is and its purpose.

What should my terms and conditions say?
The CMA guidance states you must make clear what the deposit covers.
This is known as material information and includes at least:

the circumstances in which a deposit or any part will be refunded
whether or not payment of the deposit means that the property will be taken off the market
whether the holding deposit, or any part of it, is to be used as payment towards future rental costs in the event that the tenancy agreement goes ahead
the details and sums of any costs and disbursements to be taken out of the deposit, and the approximate dates or stages in the process when these will be incurred.

If the tenancy doesn’t go ahead can the whole deposit be retained?
The CMA guidance states that a term making a holding or pre-tenancy deposit non-refundable in all circumstances is highly likely to be found unfair. This is because there are some circumstances where they are likely to be refundable:

the tenant pulls out before costs are incurred
the agent continues to market the property and the landlord has not suffered loss by the property being held
any loss the landlord suffers is smaller than the deposit
the property is not ready on the date specified and/or is not as described
the landlord decides not to let to the tenant even though all checks are satisfactory.

Part of the deposit may be retained if there has been a loss due to a fault on the tenant’s part. The amount retained should only cover the actual loss. If the loss has been mitigated, for instance the tenant withdrew at an early stage or a new tenant was quickly found the potential tenant must not be penalised.

Where the potential tenant was at fault, for instance by giving misleading information, the landlord may retain enough to cover loss of rent. The agent may retain an amount to cover reasonable costs such as reference checks.

If the potential tenant was not at fault he or she must receive a full refund.

Should the holding fee be placed in client account?
Yes. Industry Codes of Practice require the deposit to be protected in a clients’ account. The deposit does not belong to either the agent or the landlord. The tenant should also be provided with a written receipt.

In offering the above advice this Authority wishes to make it clear that only the Courts can interpret the Law.

Deposit protection scheme

From 6 April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords and agents for assured shorthold tenancies in England and Wales have had to be protected by an authorised tenancy deposit scheme. At the beginning of a new tenancy, the tenant pays the deposit to the landlord or agent as usual, who must ensure it is protected.

The Government wants to make sure tenants’ deposits are protected so that:

tenants get all or part of their money back, when they are entitled to it
any dispute between tenants and landlords or agents will be easier to resolve
tenants are encouraged to look after the property they are renting

For more information, please see the Gov.uk advice on tenancy deposits.

You might also find it useful to read our advice to landlords and letting agents on display of fees and holding deposits.

Advice for letting agents and landlords

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