Housing Rights recommends new legislation to ban letting fees

In 2017, Housing Rights, with the assistance of PILS NI,  supported local student Paul Loughran in a legal case against two estate agents. Mr Loughran sought to recover fees he had paid to both agents when he applied for a private tenancy.  

In a landmark ruling, the County Court in Belfast ruled in favour of Mr Loughran. The case clarified that no fee can be levied by a letting agent on a tenant at the start or renewal of a tenancy where that fee is a condition of the tenancy and the fee charges the tenant for services that the agent carries out on behalf of the landlord. Charging tenants for services rendered to the landlord is unlawful and fees paid for such services can be recovered by the tenant.  

Three years after the Loughran judgement, Housing Rights is still being contacted by tenants who have been charged unlawful letting fees. On the 5th March 2020, a joint statement on letting fees was issued by the Department of Finance and the Department for Communities. Both Departments stated that they believed illegal fees were still being charged by estate agents despite the court ruling.  

The charging of letting fees by agents makes it more difficult and costly to find a rented home. It places a heavy burden on low-income households, and is particularly concerning in the current context, whereby the private sector is increasingly relied upon to house individuals and families who are on limited incomes. 

Housing Rights recommends new legislation to ban letting fees

Housing Rights believes that the continued practice of charging unlawful letting fees illustrates that the case law and communiqué have not been sufficient to curb this practice. It is imperative, in our view, that legislation is brought forward to remove any ambiguity and to ensure that this unlawful practice is brought to an end.  

A newly published briefing paper sets out our recommendations for dealing with letting fees. We recommend that:  

1. Letting fees should be banned in all but prescribed circumstances. Said circumstances should include deposits and rent in advance.  
2. The amount of rent in advance and deposit that can be charged by a landlord/letting agents should be capped at a reasonable amount.  
3. Letting agents should be required by law to be transparent about their fee arrangements and charges. There should be no requirement for tenants to use third-party services, such as private referencing companies.  
4. Appropriate penalties should be introduced to deter letting agents from charging unlawful fees.  
5. Enforcement of the legislation should be carried out by local councils across Northern Ireland