New guidance for letting agents on rent ‘bidding wars’ ban published
Officials reveal how the ban will work in practice including how tenants who try to start bidding 'wars' won't covered by rules, but landlords will.
New guidance has been published by the Ministry of Housing, Communities and Local Government for letting agents revealing how its renting reforms are to stop tenancy ‘bidding wars’ once the Renters’ Rights Act begins to be implemented on May 1 next year.
It says that once a property is advertised to rent at a specific price, the landlord or letting agent involved cannot ask for, encourage or accept an offer that is higher than the advertised price.
The rules are to be enforced by local authorities and will include online adverts on portals such as Rightmove and Zoopla, printed particulars, social media posts, emails and texts and even handwritten offers.
Civil penalty
Landlords and agents who subsequently let a property for more than the initial advertised rent will, even if a tenant has initiated the request to pay more, be liable for a civil penalty of up to £7,000, while landlords and letting agents caught asking for, encouraging or accepting a higher rent a second time within five years can be fined up to £14,000.
The bar is also relatively low for whether a breach has taken place. The guidance says: “Rental bidding is a civil matter so local councils must decide on the balance of probabilities whether a breach has taken place.
“This simply means that they are satisfied that rental bidding is more likely to have occurred than not.”
“This simply means that they are satisfied that rental bidding is more likely to have occurred than not.”
The Ministry of Housing, Communities and Local Government makes it clear that a breach will have taken place even if, after asking for ‘best and final offers’ for example, no offers are made and the original asking rent is agreed on. It is the ‘asking for offers’ however obliquely worded, that will be deemed to be a request to pay a higher rent.
And the ministry also highlights that landlords or agents cannot accept a higher offer from a tenant, however genuinely made, without breaking the rules – and it will only be the landlord who pays the penalty.
Also, landlords or letting agents hoping to circumvent the rules by not revealing the rent in adverts – which currently often means putting ‘prince on application’ – will also be breaking the rules.
