Letting agents - unfair fees

Are you a landlord using a letting agent? If so do you think that you are being charged unfairly for renewing the tenancy. For instance, do they charge you a renewal fee even when you start managing the tenancy yourself.

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Some of the practices being employed by letting agents are currently being investigated by the Office for Fair Trading OFT. They have taken out a test case against central London estate agents Foxtons.

The details of the case are:

The OFT has asked the High Court to decide whether the way Foxtons continues to charge some landlords commission after a tenancy agreement has come to an end is in breach of the Unfair Terms and Consumer Contract Regulations 1999 — the same regulations that the watchdog is using to challenge high street banks' overdraft charges.

The OFT believes the practices used by Foxtons are “widespread” in the lettings industry. If its case is successful, the OFT has said it will pursue other agents that use the same terms. But it is likely that other agents would voluntarily change their terms and conditions to avoid legal action.

Foxtons continues to charge commission on a property rental after a fixed tenancy period has come to an end, regardless of whether it helped persuade the tenants to stay or is still actively involved with the property. That means if a landlord keeps the same tenants but switches to another estate agent to manage the property — or decides to do without an agent at all — he or she would still pay commission to Foxtons.

The OFT claims that is unfair. It is also challenging the agent's requirement that a landlord pay commission if he or she sells a property to tenants introduced by Foxtons once the tenancy has finished, regardless of whether the agency was involved in negotiating the sale.

Mark Horne director of Property Hawk the UK's leading website for landlord's comments:

"These charging practices are antiquated and grossly unfair. Many landlords are caught out by these kind of charging regimes."

He advises landlords to check thoroughly any agreement with their letting agent before agreeing to use them.

A judgement is expected from the OFT by the end of the year.

Have you been unfairly charged by your letting agent. Post your views here