A leading property website has welcomed a recent verdict by the High Court which ruled that renewal fees charged to landlords when the letting agent plays no part in the tenant continuing their rental agreement are unjustified, claiming it was “long overdue”.
In Office of Fair Trading (OFT) v Foxtons, Mr Justice Mann condemned the practice of landlords continuing to pay renewal fees as a “trap”, and agreed that they breach consumer regulations.
“This ruling sends out a clear and unambiguous message that businesses offering services need to ensure unexpected or surprising terms are not hidden away in small print,” said John Fingleton, Chief Executive of the OFT.
Issues highlighted by the case included letting agents forcing landlords to continue paying commission after agencies have sold the property, and when full commission is charged for selling a property to a tenant when the letting agent had no hand in the sale.
Keshav Thukaram, Managing Director of Smartlandlord.co.uk, praised the verdict: “The High Court has confirmed unambiguously what we have said all along: that some of the fees charged by letting agents are unfair and cannot be justified.
“Charging landlords renewal fees for existing tenancy agreements where the letting agent plays no part in persuading the tenant to stay, collecting the rent or managing the property is outrageous and a legal ban was long overdue.”
He added: “We are not saying that all letting agent fees are always unfair, but they must be clearly stated and transparent and only apply for services from which a landlord clearly benefits.”
Bernard Reilly from kenneth elliott + rowe solicitors based in Romford Essex commented “This judgement may open the floodgates against letting agents. Landlords, escpecially those with large residential letting portfolios, will be looking at their letting agreements carefully to see if they can reclaim any repeat commission.”
For further advice call Bernard Reilly on 01708 757575 or email: Bernard.Reilly@ker.co.uk