Do You Have to Pay to View a Rental Property?Written By PropertyLoop August 11, 2021
One of the all too often overlooked aspects of the rental sector is accessibility. Without it landlord would simply be left with a diminishing income, and aspiring renters would be exploited for extravagant costs. Whilst government regulations have made an effort to promote this mantra practically across the industry, making it easier for new tenants to rent a property without leaving themselves seriously out of pocket.
However, proposals made by start-up company ViewRabbit have been met with fierce resistance since announcing they plan to charge tenants to view rental properties. The platform stated that it would charge aspiring renters around £30 to take a tour of what could be their future home. Justifying the fees by explaining this would “guarantee” the booking, ensuring that letting agents would not be able to rearrange or cancel the viewing once booked, many cast doubt on the proposals as they would breach the Tenant Fees Act.
Whilst it is still unclear as to whether traditional or online letting agencies will be fond of implementing such viewing fees onto their clients remains to be said; but renewed attention has seen claim that such fees would not be in breach of the act providing a free alternative is still available. However, it is important to note that if a tenant is put in a position where they must pay to view a rental property this would be considered a violation of the tenant fees act.
The introduction of the Tenant Fees Act in 2019 was met with some criticism with landlord over further limiting the control they hold over there investments by way of recuperating unexpected and unavoidable costs associated with managing a rental property, establishing a tenancy alongside dealing with damage and arrears. The regulation was implemented to make the private rental sector more accessible to renters, prohibiting landlords from charging tenants high upfront costs before they even moved into the property.
With this in mind the act reduced the amount a rental property owner was able to request there tenants pay in the form of a tenancy and holding deposit. After the regulations landlords were only able to request up to a single weeks rent for the holding deposit from their tenants. The maximum amount a landlord can request for the tenancy deposit is determined by the amount they charge their tenants in rent each year. If the annual rental fee for the property is up to £50,000, the landlord can ask their tenants to pay as much as five weeks rent for the security deposit. However, if they charge over this amount each year in rent, the owner of the rental property can request their tenants pay up to the equivalent cost of six weeks rent for the tenancy deposit.
Further to this the act prohibited landlord from charging tenants many historically “accepted” fees that came with the tenancy, such as viewing costs, cleaning fees, gardening fees, referencing & guarantor charges, inventory collection fees, ect.
What Can Landlords Charge Tenants For?
It goes without saying that there are some costs that landlords are able to pass onto their tenants, alongside fees that have remained unaffected by the Tenant Fees Act. Perhaps most obvious of the fees landlords are able to charge their tenants is rent. It comes as no surprise that this would be left intact, it is worth noting that ;landlord must ensure that the amount they wish to charge their tenants to occupy the rental opportunity should be clearly established before the tenancy agreement is signed. In most cases rental property owners are prevented from increasing the amount of rent their tenants are required to pay during the fixed term, with any amendments requiring the landlord and tenant to enter into a new tenancy agreement with a revised rental fee. These sporadic changes in rent charges cannot also be used to cover any recent costs incurred by the landlord such as repairs or establishing a tenancy, for example requesting a tenant pay additional rent in advance, yet the rent paid here is more than over the course of the tenancy period, and must amount to the usual periodic charge that would have otherwise been implemented. With this being said, rental property owners are able to modify the amount of rent a tenant is required to pay through a rent review clause. However, the terms within the agreement must specify when the tenant can expect the increase to take place.
Whilst the tenant fees act did establish a threshold on the amount a landlord can request their tenants pay in the way of a deposit before moving into a rental property, landlords are still able to exact such costs onto their tenants. Before moving into a rental property it is common that an aspiring tenant will be required to pay the landlord a holding deposit. This deposit essentially reserves the rental opportunity and establishes a deadline by which both the landlord and tenant must enter into a new tenancy agreement. A new tenancy agreement must be signed with 15 days of the holding deposit being paid, with the landlord being legally obligated to return the paid amounts to the tenant with seven days of the tenancy agreement being signed. In most cases the amount taken for the holding deposit will not strictly be refunded in a traditional manner, but rather act as a reduction from the renter’s initial rental payment to the landlord.
However there is circumstance under which the prospective renters would not see their holding deposit be refunded; primarily if the tenant fails their right to rent checks, decides they do not wish to proceed with the tenancy agreement, or offers the landlord false or misleading information during the tenant referencing process. With this being said, if the landlord does not wish to proceed into a new tenancy with the tenant after they have paid the holding deposit, the landlord is required to refund the aspiring renters in full within seven days. Similarly, if the deadline for entering into a new tenancy agreement has been surpassed and neither party was able to come to a compromise regarding the terms of the agreement, once again the full amount taken for the holding deposit will be returned to the tenant within a week.
As can be expected, landlords are also able to request the occupants of their rental accommodation first pay them a tenancy deposit prior to moving into the property. Occasionally referred to as the security deposit, although landlords are under no legal obligation to take a tenancy deposit from the aspiring renters, the overwhelming majority of rental property owners choose to do so. This is because whilst tenants can have this amount returned to them in full, this is largely dependent on their conduct as the deposit is intended as a financial safeguard for rental property owners. Put simply, if a landlord or letting agent finds damage or other signs of neglects throughout the rental property during the final inspection of the tenancy, they are able to deduct the associated costs of the needed repair or maintenance from the amount paid for the tenancy deposit. Whilst the deductions landlords are able to make from the amount of the tenancy deposit being repaid to the tenancy is synonymous with remedial work, the landlord is also able to make deductions for any missing rental payments.
It is worth noting that if the landlord requests that there tenants pay a security deposit, the appropriate amount must be entered into a government approved deposit protection scheme, with the details of the scheme and the amount being protected being supplied to the tenant. These serves will safeguard the taken amounts and can offer as a mitigation party during disputes surrounding tenancy deposit deductions. If you find that the landlord has not protected your tenancy deposit and decide to take legal action, the rental property owner or letting agent could be legally compelled to pay the tenants as much as three times the amount originally taken for the deposit.
Alongside this landlords are also able to charge the occupants of their rental property for any misplaced or damaged items such as security door fobs and keys. The caveat is that this expenditure must be detailed within the tenancy agreement, with the landlord or letting agency providing the tenant with proof of purchase such as an invoice or receipt, showing the fee they incurred was reasonable. To the dismay of tenants, landlords that choose to enact late fees on their rent can also be found within their rights to do so. If the owner of the rental property wishes to enforce default fees then this must be made explicitly clear with the tenant within the terms of the original tenancy agreement. Although a landlord is able to charge their tenants default fees, a limit is placed on these charges, established at 3% above the Bank of England’s rate for each day the tenant fails to pay their rent. If the default payments are found to be above this threshold then the landlord will be found in breach of the Tenant fees Act.
Benefits of 3D Virtual Viewings
The passing of the frankly ridiculous prospect of charging aspiring tenants for the chance to view a rental property is just another example of those that share the mind set of traditional high street and online letting agents, refusing to change the industry for the better and instead extort it for another sales funnel. This is why with PropertyLoop we empower prospective renters and interested parties to view any rental property at any time through our virtual viewings process.
Whereas online property portals and other letting spaces have been home to pictures that give less than accurate impressions of the true lettings opportunity, our 3D virtual viewings use billions of collected reference points to ensure that each property is meticulously recreated with complete dimensional truthfulness, showing the character of each rental in true detail and definition. This new form of property media empowers aspiring renters to enjoy a more independent and natural viewing process, allowing them to explore each opportunity at their own pace whilst offering a new way for tenants to experience the personality of each rental without any interference or charges.
This is of course without mentioning the necessity virtual viewings have become over the course of the pandemic. In the midst of months of lockdown measures, there was an obvious risk associated with landlords, letting agents and existing tenants all potentially being present whilst showing an interested party around the rental opportunity. Under such conditions the practicality of 3D virtual property viewings has become undeniable, allowing tenants to explore each rental opportunity multiple times without the need for lengthy commutes and negotiating mutually convenient times for letting agents and tenants.
Alongside this, listings for rental properties that include 3D virtual viewings have been found to yield aspiring tenants of a higher quality. This is because the tenants that are interested in the rental opportunity will be provided with a far greater insight into the opportunity from the comfort of their home, meaning only those that have a far higher intent of proceeding with the tenancy agreement will request an in person viewing, and ultimately reducing the number of aspiring tenants the landlord needs to reference, reducing their initial expenditure for establishing a tenancy. This is not to be overlooked with many traditional high street letting agencies and their online counterpartys charging rental property owner’s high fees for each tenant they wish to reference; making landlords find their ideal tenant at an exorbitant premium. With this in mind, because of the clarity virtual viewings offer aspiring renters, we have found that 25% of rental opportunities advertised online alongside a virtual viewing found a new tenant without an in person walk through of the rental taking place.
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