Administration Fees in the Spotlight Again!

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The London Borough of Camden has become the latest London Borough to crackdown on the use of ‘administration fees’ as a catch-all term for fees recovering the costs of various chargeable services offered by many letting agents.

The latest in a long-running case, which began back in early 2016, has seen Camden Council succeed in its recent appeal against Foxtons Ltd for continuing to use the term ‘administration fees ‘in its tenant facing literature.

Trading Standards in the Borough issued four branches of the letting firm with notices in respect of failing to observe the requirements of the Consumer Rights Act 2015 – namely by failing to detail what services were being provided in return for an admin fee.

In response Foxtons amended their tariffs, but not sufficiently to satisfy the Council – leading to the issuance of four Final Penalty Charge Notices.

Subsequently the agency appealed, with the First Tier Tribunal finding that, although the use of vague terminology did represent a breach, the firm had acted appropriately in amending their literature. As a consequence the penalty charge stood, but was reduced to £3,000.

Never a Council to cut their losses, Camden took up their option to appeal to the Upper Tier Tribunal in June this year, with the tribunal finding in their favour and increasing the notices back to £4,500.

Quick recap:

  • Foxtons given 4 x £5,000 notices
  • Foxtons appeals, notices reduced to 4 x £3,000
  • Camden appeals, notices increased to 4 x £4,500
  • Cost of legal advice, tribunal time etc. etc. ?

In the judge’s opinion the £500 reduction (from the original maximum penalty) was appropriate in recognition of Foxtons’ attempt to comply with the original notice.

Foxtons was given 28 days to appeal (from 25 August 2017) which appears to have lapsed without them taking up the option. However, given the legs on this case who knows if this is really the end.

Camden’s cabinet member for housing, cllr. Pat Callaghan, certainly seems to think this is the end of the matter though, stating:

 “We are delighted with this judgment as it has clarified what letting agents must do when publicising their fees. Because of our successful appeal, customers can now fully understand what they are liable for and make informed choices and proper comparisons with other letting agents about the fees charged.

This judgment also gives clarity to Trading Standards officers nationally when enforcing fees and by assisting to ensure the market place is consistent for all letting agents and their prospective clients.

The moral of the story?

Before they are banned completely, if you are going to charge for administration tell your customers what they are getting for their money – they might even appreciate what you are doing for them a little more.

Or you could spend months in front of tribunals. Your choice.

This entry was posted in Blog, Letting agent redress, Regulation and tagged , , . Bookmark the permalink.

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