Landlords beware - Don't believe everything you read!
Mary-Anne Bowring 21/11/2018
4842
The Misleading Promise of Guaranteed Rental Income
A property management company has come under scrutiny after advertising a "guaranteed rental income" to landlords, even in cases where tenants fail to pay. The promise, which appeared on the company’s website, has raised significant concerns and was deemed misleading by the Advertising Standards Authority (ASA).
The Fine Print Wasn’t So Fine
While the advertisement promised landlords regular rental payments regardless of tenant payment, the critical details were hidden in the fine print. The ASA found that the company failed to clearly outline the limitations of this guarantee. The small print did not include essential information, such as the specifics of how the rental payments were structured.
A Closer Look at the "Guaranteed Rent" Scheme
Upon further investigation, the ASA revealed that the rent guarantee was not as straightforward as it appeared. The company’s guarantee was based on a model where they became the tenant and sub-let the property to others, which was not made clear in the advertisement. This lack of transparency was a major factor in the ruling.
The ASA’s Ruling: A Breach of Advertising Standards
The ASA determined that the advertisement violated their advertising code. It found that the company failed to clarify the significant limitations of the offer and misled landlords by not providing a full explanation of the terms and conditions. The ad was subsequently banned from future use, sending a clear message to advertisers about the importance of transparency.
What Advertisers Can Learn from This Case
This case highlights the importance of clarity in advertising, especially when it comes to financial matters. Advertisers must ensure that all limitations and conditions of a product or service are clearly communicated. Failing to do so can lead to legal consequences and damage to a brand’s reputation.
The Age-Old Lesson: If It Sounds Too Good to Be True…
The key takeaway from this situation is a timeless piece of advice: If an offer sounds too good to be true, it probably is. Landlords should exercise caution when presented with offers that seem overly promising, and always ensure they understand the full terms and conditions before entering into any agreement.
Planetrent Properties
info@planetrent.co.uk
0208 0599 550 (for sales)
Under Offer: This term applies to a property where the landlord is considering an offer but remains on the market. It implies that further offers may still be considered until the landlord formally accepts or declines the current offer.
Let Agreed: This term indicates that a landlord has provisionally agreed to enter into a rental agreement with a prospective tenant, pending additional checks and referencing. It doesn't require the prospective tenant to have paid a holding deposit.
Let: This term signifies an established binding rental agreement between the landlord and tenant.
For both lettings and sales, the guidance addresses additional terms:
New On The Market: This term is used for a property not advertised since its last sale or rental. It should only be used for a brief period.
New Instruction: It applies to a property assigned to an agent for marketing recently, even if it was previously listed with another agent without being sold or rented.
New and Exclusive: This term refers to a property that is either new on the market or a new instruction, exclusively available through a specific agent or portal.
New Method of Sale/Let: This term is used when a property is being marketed for sale or rent using an alternative approach to the original advertisement, such as transitioning to an auction or sealed bid.
Reduced: This term indicates that a property's price has recently been reduced. The reduction should be genuine and comply with the Chartered Trading Standards Institute's guidelines on pricing practices.