Letting agents across England are utilizing potentially unfair terms and conditions – and could be breaching consumer law by demanding deposits before letting renters even visit a contract – a Which? investigation finds.
We visited 20 letting agents across England, pretending to be prospective tenants and looking to rent a property.
Our mystery shoppers asked to see a copy of the conditions and terms they would be registering with, only one in four agents didn't provide a contract.
Five letting agents, including a branch of Connells, which has almost 200 branches nationwide, required a commitment or perhaps a holding deposit prior to the tenants could view a sample letting agreement. Whenever we asked for an answer, Connells told us that tenancy agreements should be freely available on request.
In some cases, the letting agent also requested a reference check to become paid for and completed prior to the tenant saw the contract terms.
At Which?, we're concerned many renters might be rushed into signing rental contracts they do not fully understand and that contain potentially unfair clauses, as they may feel pressured to have a property quickly – particularly in places that demand is high.
Get started with our guide: Renting a home – the first steps
Our investigation results
Our investigation revealed a number of concerning practices by a host of letting agents. In the table below, we’ve listed the potentially unfair, misleading and confusing terms or practices our mystery shoppers experienced:
Letting agents requested cash before handing over contracts
Letting agents have a duty by law to supply prospective tenants with the key information they have to make an informed decision concerning the letting. Which? believes demanding a financial commitment before tenants can observe the terms and conditions could fall foul of consumer law by trapping tenants in contracts they haven't had an opportunity to review.
Worryingly, three of the letting agents that required a commitment or deposit before tenants often see an agreement are members of the Association of Residential Letting Agents (ARLA), a leading membership body for the letting agent sector.
One letting agent in Leeds requested the tenant visit their office to read the tenancy agreement. As the agreement was accessible in this example, this practice could place undue pressure on the tenant to see their contract quickly, or deter them from reading it whatsoever.
Are you a landlord? Read our help guide to letting agents to ensure you select a reputable firm.
Tenancy agreements contain unfair terms
A report published last year by Which? says nearly sixty-six per cent of tenants who used a letting agent during their search for accommodation experienced problems, for example having to make decisions lacking the necessary information.
In 13 tenancy agreements collated and inspected using their company letting agents, Which? found proof of potentially unfair terms and clauses that could be in breach from the Consumer Rights Act.
In seven of the contracts we analysed, tenants was required to seek permission or notify their letting agent or landlord before switching utility supplier, which may prohibit their right to decide for themselves and could mean they're stuck on rip-off tariffs.
‘Unclear language’ used in tenancy agreements
Which? also found proof of unclear language that could confuse tenants in a minimum of eight contracts. Such as vague descriptions that tenants may be required to pay for a ‘reasonable’ amount or ‘a fair proportion of’ additional charges.
But without adequate explanation of what those charges could be for or what is really a ‘reasonable’ or ‘fair’ proportion, tenants could risk being hit with extortionate fees throughout their tenancy.
All the contracts we reviewed referenced statutes and legislation which were not attached or explained further inside the agreement, putting tenants – most of whom are unlikely to be experts in property law – in an unfair disadvantage.
Understand key terms within our letting agreement checklist
We are calling on the CMA to investigate
According towards the latest results from the Which? Consumer Insight Tracker, just one in ten people trust estate and letting agents. Only car dealers are trusted less through the UK public.
Which? has heard complaints from tenants whose landlords entered their property without prior notice or who faced excessive charges for minor mending.
The findings of the investigation suggest tenants can’t always trust letting agents to act within their best interests, and with some agencies apparently skirting what the law states, we are contacting your competition and Markets Authority (CMA) to investigate further issues relating to tenancy conditions and terms and letting agent practices in the rental sector and also to do something where needed.
Fed up? Get advice on how you can complain about your letting agent
A letting agents’ code of practice
The government should also proceed with introducing a mandatory code of practice for letting agents that's legally enforceable and ensures all agents are held to an agreed group of professional standards.
Natalie Hitchins, head of home services and products where?, said:
‘It’s outrageous that some agents are demanding cash in advance before tenants are even shown a contract – committing them to agreements before they are fully aware what they’re signing up to.
‘The results of the Which? investigation show how vital it's for that government to introduce a legally enforceable code of practice to make sure all letting agents act inside a professional manner.
‘The CMA must also investigate sector and do something where required to tackle unfair practices and car loan terms.’