A letting agency has been demanding hundreds of pounds in payment before prospective tenants are allowed to view properties for rent, the BBC’s Victoria Derbyshire programme has found.
The practice, by Flintons, breaches guidelines and could be unlawful.
Shadow housing minister Melanie Onn said renters needed more rights and the case was the “tip of the iceberg”.
Flintons, in London, denied any wrongdoing and said it did not charge any fees for viewings.
‘Something was wrong’
Guidance from the Competition and Markets Authority says that to “require a deposit from a tenant before they have been given the opportunity to inspect the property or the tenancy agreement” could constitute an “aggressive practice” and be unlawful.
Several of Flintons’s clients told the Victoria Derbyshire programme they had been assured by their estate agent that they would have their payment refunded if they did not like the property but after requesting refunds had been told the money was not refundable after all.
Israel Kujore and his friend Harry responded to one of Flintons’s adverts.
He said they had gone to see an agent who had told them they needed to pay a deposit to see a room but that the money would be refundable.
They had paid £300 each to see a property, but Israel soon realised something was wrong.
Mr Kujore had then looked into the company online and found dozens of negative reviews.
“I was seeing reviews and horror stories. I was feeling really miserable and defeated. I was really upset,” he said.
He had decided to seek a refund but had been told that the money was not refundable.
“£300 is half my rent gone. What can I do? I don’t have the money to sue them. I don’t have legal expertise to deal with it – I’m powerless.”
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Flintons said it issued receipts specifying the sums involved were non-refundable.
While this is true, Mr Kujore – and other tenants with similar experiences – said they had not been given this document to sign until after they had made the payment.
They added that at the time they had been assured verbally that they could get their money back and that they had felt under pressure to pay the money immediately.
David Smith, a leading specialist in residential landlord and tenant law, said the practice was legally questionable.
“Asking somebody for money, without being able to see what that contract is about, to do a viewing, would quite likely to be seen by professional people in the property sector as unreasonable and unfair behaviour,” he said.
“It is therefore likely to be an offence under the consumer protection from unfair trading regulations.”
Ms Onn called for the government to give greater protection to renters.
“Letting agents as well as landlords should be properly regulated,” she said.
“Of the 8,000 letting agents we’ve got around the country, only about half of those are voluntarily signed up to a code that means that they will operate to the highest professional standards. That means that half of them are not.”
Flintons denies any wrongdoing.
It said it did not charge any fees for viewings and payment was taken only when someone confirmed they wanted to rent the property.
It said these payments were taken as a “holding deposit” – money paid to a landlord or letting agent to reserve a rental property – which were always non-refundable and that it did not believe there would be any purpose in taking deposits if the individual could get their money back.
It added that all those featured in the BBC’s report had been made aware that their deposits were not refundable and it did not agree with their version of events.