MY friend and I got talking over the proverbial garden fence about the vicissitudes of life when one has to rent accommodation privately in Jersey.
We discussed whether this predicament was compounded or alleviated by that great self-regulating and self-policing Jersey institution who self-identify as ‘estate agents’. Unfortunately, all too often the only appropriate suffix which can be applied to ‘self’ when discussing this institution, is ‘serving’. As far as I know, there is no regulatory body which sets down a definition of who or what an ‘estate agent’ in Jersey actually is or is expected to be or do.
Given the lack of oversight of this great institution (as was recently reported in this publication), the lack of qualification or competence to become one, and the lack of regulation to continue to be one, it should come as no surprise at all that there is a lack of clarity of what in Jersey are the duties or obligations of ‘estate agents’.
We would all like to think that we would probably know an estate agent when we saw one; but do you know whose agent he or she is? What does that mean? Ask yourself this question: who is the estate agent obligated to be loyal to and whose interests will they put first – yours or the property owner’s? The one who pays them a finder’s fee, an ongoing management fee for looking after the property, or a one-off ‘administration fee’?
Who is the ‘estate agent’ even acting for when they ask you, a prospective tenant, to pay an ‘administration’ fee? What are you paying for? One might even say that all these charges look awfully similar to a premium or a fine.
A new phrase I learnt this week: ‘key money’. It’s found in Jersey’s housing legislation in the Residential Tenancy (Jersey) Law 2011. It’s on the States’ Tenant and Landlord Rights website. It’s described as something you can’t put into a lease but there’s no definition in the legislation or on the website of what it actually means.
A cursory Google search brings back a number of hits which you may find to be an interesting read when you have five minutes at the bus stop. One definition which caught my eye was that it is: ‘a fee paid to a manager, a landlord, or even a current tenant to secure a lease on a residential rental property… in some competitive rental markets, key money is simply a gratuity or a bribe’. (The term landlord is adopted as shorthand for landlord, landlady and lessor because the States uses this term on its website.)
I have heard of ‘admin fees’ being requested up front, ranging from between £150 to £300 to ‘secure the property’, have it ‘taken off the market’ and ‘stop it being advertised’, usually together with some reference to costs being involved in the preparation of paperwork.
When I have asked about them, not one agent has been able to give me a satisfactory explanation of what the administration fee is for – it is simply requested as standard practice and it is paid without question.
So what’s wrong with an admin fee? Well, are estate agents acting for you when they are also at the same time taking fees from the property owner to find and install a tenant? Why do potential tenants paying ‘administration fees’ also pay for credit checks or pay so much for credit checks, if that is what the fee is for?
Surely a credit check is part of the due diligence and service the ‘estate agent’ is being paid to complete for the property owner.
Credit-check costs are expenses incurred in providing that service to the property owner – why are they being made to be tenants’ obligations? As potential tenants, when did you ever ask for a credit check to be done on yourselves? Did you want one? Did you want to pay for it? Did you think you needed it? Of course not. What benefit is it to you, the prospective tenant, to know whether you are a credit risk or not? The answer is simple: none.
These fees, and the practice of charging for references, credit and immigration checks, and renewing fixed-term tenancies have been banned in England for a number of years for very obvious reasons – they are unjustifiable. In England, there are serious consequences for letting agents (estate agents working on rentals acting as agents for landlords) who break the rules more than once. For the first offence a letting agent can be fined £5,000 per breach identified; if they repeat-offend within five years they have a £30,000 penalty applied or they can be prosecuted with an unlimited amount in fines being sought; at that level they can also be banned from operating as a letting agent and put on the government’s rogues register.
In Jersey, does it matter who the estate agent is acting for? Yes. Does it matter that administration charges are being asked for and paid? Yes.
The lack of transparency as to what these fees are for, why there is such disparity between the amounts charged by different agents, and the ability to secure a home – in a market fraught with housing supply issues – being dependent on agreeing to pay large one-off sums should be of concern to us all.
Anyone can look, find and read the Jersey housing law – the spirit of the law is not being followed by agents or their principals (the landlords), even if the letter of the law is. Landlords have not, so far as I have seen, been recording in their leases that their agents are orally seeking one-off payments by way of ‘administration fees’ from tenants for them to be able to enter into a lease for the home.
It would seem, therefore, that there are no lawsuits to be had – the strict letter of the law has not been broken.
Two questions strike me: who is driving this practice? Is it the landlords or estate agents or both? Secondly, who can tenants or potential tenants complain to about estate agents, their practices or ethics? No one.
If, by coincidence, there has been an incidental breach of Jersey’s limited consumer laws there may be an avenue to pursue limited redress on that one issue but nothing else.
Those who self-identify as ‘estate agents’ are intrinsically involved in pushing, shaping and influencing local housing practices. It is disheartening to see that, having been left to self-regulate, this industry more often than not has been solely focused on profit and self-interest rather than building themselves up to be a robust institution that serves the community in which they must operate.
As a broad generalisation, estate agents don’t seem to encourage good practices on the part of landlords, and landlords who use estate agents seem to be dependent on estate agents to guide them as experts in residential rentals.
There is a perfect storm in Jersey: a dearth of fit-for-purpose modern housing law; no rent/income proportionality controls; no rent caps to temper an effervescing market where, even on the States’ own standard-terms Model Residential Tenancy Agreement, based on the December Retail Price Index rates rents can be raised by up to 12.7%; no independent studies or monitoring bodies tasked with reporting on the societal impact and development of housing-related policy/matters; no oversight or transparency of that great unlicensed, unaccountable and unregulated Jersey institution whose members are better known as ‘estate agents’. But please don’t get me wrong, there are some good estate agents in this great isle, but, like fairy godmothers, they choose to be good in a world of delinquency, and they are hard to come by.
There is nothing with teeth or even bare gums to make estate agents adhere to basic standards of competence or professionalism; nothing to give hard-working people, who often have little choice but to become tenants, easy ways of ensuring they are treated properly and with the respect they deserve. Surely hard-earned money, spent on eye-wateringly high rents and expensive ‘administration fees’, should at least buy tenants or prospective tenants competent, respectful, and polite (if not actually good) service, together with the right to be treated fairly in law, both under substantive housing law and the law which governs and regulates the creation of the landlord and tenant relationship, whether the landlord acts alone or through an estate agent.
There is not even the barest of compensation schemes which seeks to offer redress to tenants or potential tenants who are inconvenienced in wasted time or who are actually out of pocket due to self-serving or just inadequate estate agents.
There is no incentive or requirement for them to do better.
Now, Dear Reader, have you ever tried to address a complaint to an estate agent? I would welcome your thoughts and experiences on how you have fared in a system in which estate agents are not obliged, and frequently do not have a complaints process, let alone a published complaints procedure.
I know of some instances where estate agents who received complaints or are asked to give details on how a complaint can be made about their conduct or performance, simply resolve it by completely ignoring all correspondence on the subject and disengaging with the potential tenant. The disdain and contempt is encouraged by the lack of external regulation, oversight or consequence for bad behaviour: I mean, really, how dare these people raise a complaint about the conduct of estate agents in a system designed for them to operate with impunity.
Well Dear Reader, with all the recent talk from politicians about there not being sufficient complaints having been made about the conduct of ‘estate agents’ to warrant or justify regulating their competence – let alone their ethics – in a system which makes no provision to complain, I thought you and I could have a regular good old over-the-garden-fence chat about our real-life experiences of being Mr, Ms, Miss or Mrs Ordinary in Jersey, just trying to find a home to live in.
I don’t think we are alone in our experiences of finding homes in Jersey which we wish to pay good money to rent; and a lot of it at that.
I would love to hear from you too directly – a problem shared is a problem halved. So, over the coming weeks I think we will have plenty to discuss, from the lackadaisical and sub-standard service potential tenants are forced to accept and are expected to be grateful for, the published material about accommodation put out there which has a casual relationship with the reality, the absurd and bizarre lease terms being offered up as ‘standard’, approaches to what discrimination in practice looks like, and everything else in between.
Before we move on, it would be remiss of me not to also discuss the small but significant number of landlords in Jersey: the DIYers.
They do the entire rental thing themselves from advertising, preparing the property for viewings, and showing it at the start, all the way through to checking tenants out at the end of a lease. Some are young, some are older, and some are in the middle – some have one property, some have more. I have been pleasantly surprised by this group of landlords.
My own experience of DIYers and experiences others have shared has been positive and in direct contrast to that of estate agents. DIYers on the whole seem to consistently act with professionalism, are efficient and are pleasant to deal with.
I don’t know about you, Dear Reader, but the difference between directly dealing with a property owner and an estate agent is like night and day. I would love to hear from you on this too, whether the experience was positive like mine or not.
We’ll revisit the DIYers another day and look at what impact regulation might have on them – I’ve given this some thought previously and always come to the conclusion that they would be the least impacted group by any compliance burden and new minimum standards because they are already doing so much by way of good practice.
As I say, Dear Reader, please feel free to drop me a letter or note (hand-written or typed) c/o the JEP office, or send me an email, but please be sure to send a copy of your letter or email to Messrs Renouf and Warr. Sharing is caring, after all.
If you are in doubt about how to copy your letter or email to them, the library is an invaluable resource – it has free Wi-Fi and delightful librarians who might be able to assist you to get photocopies or send an email.
So, Dear Reader, what shall we discuss next week? Let me have your thoughts. I am already looking forward to speaking again soon.
Ciao for now – I have got to run!
Ms A Verage