2.2 For agents only: accepting instructions from a landlord
2.2.7 Fees, charges and taxes
Agents must provide clear details of their fees and expenses which may become payable, in accordance with the Advertising Standards Authority and Consumer Protection from Unfair Trading Regulations 2008 requirements.
These should be published on their website and displayed prominently in all offices where customers enter.
If the agent does not know the exact amount at the time, they should give details of how it will be calculated. This should include any renewal commission and the method of calculation, making clear that this will only arise where the agent is instructed to renew the tenancy or the landlord has specifically agreed to the agent’s entitlement.
Agents should state all fees inclusive of tax, a legal requirement where the landlord is not a business.
Agents must include any contractual right to interest on late payment in the terms of engagement. The terms of engagement should set out which party retains any interest accruing from client money held.
This is all about clarity and transparency.
Agents must provide full details of all their fees and how they are to be incurred on their websites and on all relevant marketing material. You can find out more about the Advertising Standards Agency here.
Fees must be given inclusive of VAT.
You need to be careful, in these times of low bank base rates, not to charge too high a rate of interest. Or this may be considered unfair under the UTCCR.
However be aware that if you bring Court proceedings for (for example) unpaid commission, you will be able to charge the statutory interest rate which is currently 8%.
So far as interest on money held is concerned, strictly speaking this is the landlords money. So if you want to retain interest on money in your bank account, this needs to be clearly set out in your agency agreement and agreed by the landlord.