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agent46

Sympathy For The Devil

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Apologies in advance for the length of the post ;)

I work for a letting and management agency and given that a few of our landlord clients have been enticed away from us by Foxtons, there is absolutely no love lost between me and this bunch of chiselling little shysters. However, after reading the comments on this site and other similar websites and in the light of my 12 years experience dealing with landlords and tenants, I have the following comments to make:

1) A great number of landlord contributors make claims of being “forced” to sign documents or, incredibly, simply admit to signing documents they have not read. Well, firstly, unless threats of violence are used, then nobody is ever forced to sign an agreement. If those “threats” are merely high pressure sales techniques, then surely that sends a message, loud and clear, that this company does not have their clients’ best interests at heart? Secondly, if someone signs a contract without reading it, then unless they are mentally sub-normal, then frankly they deserve everything they get.

2) Many landlords are seduced by Foxtons’ blatant overvaluation of their property. Any sensible person would obtain valuations from several agents. If for example 3 agents have valued the property at £280 - £300pw and then some 16 year old oik from Foxtons rocks up and values the flat at £450pw, then alarm bells should be ringing. However, it seems that some landlords can’t hear those alarm bells because they are deafened by the noise of cash registers ringing.

3) In my experience, (and this will probably not go down too well on this forum) the majority of landlords are lazy, greedy and none too bright. Foxtons play on these attributes and are very successful indeed in doing so. Frankly, I find the concept of landlords complaining of unfair treatment at the hands of a bunch of dishonest parasites somewhat ironic and rather amusing.

4) I have lost count of the amount of times that tenants have failed to read contracts (ie: holding deposit agreements and tenancies) that I have given them to sign, often simply dismissing a document on which thousands of pounds of their money and the manner in which they can use their own home, depends, with a bored, contemptuous “Oh, this is just a standard contract, I can’t be bothered reading it.” I regularly have to ask tenants to please stop gossiping amongst themselves about their weekend and read the tenancy agreement, and I also make a point of not signing documentation that has not been read properly by the tenants. However, I often wonder why I should go to such lengths to protect their interests when they won’t take those simple steps themselves…...

In short, most people these days are used to being pampered like mediaeval princes. As such, they do not take any responsibility for their own interests, and instead expect that a kindly Government agency will do their thinking for them. Naturally, given that they act like molly-coddled children, they stomp their feet and whinge “IT’S NOT FAIR!!!” like spoilt brats when they discover that the world is full of nasty young men in shiny suits and green Minis who are out to relieve them of their cash.

Which leads me neatly onto the case of OFT v. Foxtons, in which the OFT are seeking an injunction prohibiting Foxtons from including terms in its contracts with landlords that:

• charge a fee for renewal of a tenancy

• charge a fee when the property is sold to the tenant

The OFT claims such terms are unfair.

IMHO, the OFT case is fundamentally wrong-headed for the following reasons:

(a) A landlord should not be classed as a “consumer” for the purposes of the Unfair Terms in Consumer Contracts Regulations 1999.

( b ) From memory, the Regs do not apply to “core terms”. These are terms governing the subject matter or price of the contract.

( c ) It is repugnant in principle to deprive a company of the benefit of a term which has been agreed to by a person of sound mind.

(d) The situation is not, as some contributors have claimed, analogous with the action against the banks in respect of overdraft charges because,

(i) If a landlord does not wish to pay the % fee provided for in the contract, then they can re-negotiate the fee or go elsewhere. In order to keep their business, I have regularly had to waive or reduce renewal fees, simply because one of my competitors would be only too happy to do the same.

(ii) Banks all charge the same type and level of fee and are huge, faceless organisations. As such, the consumer has absolutely no chance of re-negotiating the over-limit fee. Obviously, this is not the case with a letting agent, where you can invariably speak to someone (usually face to face if required) with sufficient authority to take this kind of decision.

(iii) The legal challenge to the banks’ over-limit charges is based primarily on the principle that damages for breach of contract should be compensatory and not punitive – in other words, if the customer going over their agreed limit only costs the bank £1, then that is what they should receive and not the £35 or so, they presently charge.

(e) Essentially, the OFT v. Foxtons case seems to be based on the principle that landlords are of such utter, bovine stupidity that they cannot look after their own business interests and that they need Big Brother to intervene on their behalf. In short, it is a further step towards making society even more infantile than it already is. Am I alone in finding that slightly worrying? I hope I am not alone in believing that people should be encouraged to take more responsibility for their own interests, not less.

(f) It is ill-considered on economic grounds for the following reasons:

(i) I work for a small, independent agency. Approx 30% of our income comes from renewal fees. If the OFT wins the case on the renewal fees point, all agents will be barred from charging those fees and I can envisage our firm having to either close down or shed staff if our turnover is reduced by such a dramatic amount.

(ii) The business model and level of fees charged by agencies is based on annual receipt of a certain level of fee income received from all sources. If renewal fees are declared verboten, then eventually, agents will seek to make up this lost income stream either by charging higher letting fees or charging higher admin fees to tenants and so a form of equilibrium will return (in other words, we will be back to square one). Unfortunately, by that time, those smaller agents like ourselves will have been unable to absorb the dip in turnover and will probably go to the wall. Ironically, it is often the small, independent agencies that give the most professional service and offer the fairest terms to landlords.

(iii) The loss of renewal fees will have to be made up by way of increasing the volume of lettings contracted. More volume = less time on each transaction = more mistakes = poorer quality of work.

(iv) Without an incentive to contract renewals, some less ethical managing agents might well be tempted to engage in underhand tactics that force tenants to move out rather than to renew. I know of at least one unscrupulous agency that used to do this in any event simply because they received 10% for a letting fee, but only 5% for a renewal fee.

Hence, I find myself in the rather odd position of wishing Foxtons all the best with their case.

Edited by agent46

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Apologies in advance for the length of the post ;)

I work for a letting and management agency and given that a few of our landlord clients have been enticed away from us by Foxtons, there is absolutely no love lost between me and this bunch of chiselling little shysters. However, after reading the comments on this site and other similar websites and in the light of my 12 years experience dealing with landlords and tenants, I have the following comments to make:

1) A great number of landlord contributors make claims of being “forced” to sign documents or, incredibly, simply admit to signing documents they have not read. Well, firstly, unless threats of violence are used, then nobody is ever forced to sign an agreement. If those “threats” are merely high pressure sales techniques, then surely that sends a message, loud and clear, that this company does not have their clients’ best interests at heart? Secondly, if someone signs a contract without reading it, then unless they are mentally sub-normal, then frankly they deserve everything they get.

2) Many landlords are seduced by Foxtons’ blatant overvaluation of their property. Any sensible person would obtain valuations from several agents. If for example 3 agents have valued the property at £280 - £300pw and then some 16 year old oik from Foxtons rocks up and values the flat at £450pw, then alarm bells should be ringing. However, it seems that some landlords can’t hear those alarm bells because they are deafened by the noise of cash registers ringing.

3) In my experience, (and this will probably not go down too well on this forum) the majority of landlords are lazy, greedy and none too bright. Foxtons play on these attributes and are very successful indeed in doing so. Frankly, I find the concept of landlords complaining of unfair treatment at the hands of a bunch of dishonest parasites somewhat ironic and rather amusing.

4) I have lost count of the amount of times that tenants have failed to read contracts (ie: holding deposit agreements and tenancies) that I have given them to sign, often simply dismissing a document on which thousands of pounds of their money and the manner in which they can use their own home, depends, with a bored, contemptuous “Oh, this is just a standard contract, I can’t be bothered reading it.” I regularly have to ask tenants to please stop gossiping amongst themselves about their weekend and read the tenancy agreement, and I also make a point of not signing documentation that has not been read properly by the tenants. However, I often wonder why I should go to such lengths to protect their interests when they won’t take those simple steps themselves…...

In short, most people these days are used to being pampered like mediaeval princes. As such, they do not take any responsibility for their own interests, and instead expect that a kindly Government agency will do their thinking for them. Naturally, given that they act like molly-coddled children, they stomp their feet and whinge “IT’S NOT FAIR!!!” like spoilt brats when they discover that the world is full of nasty young men in shiny suits and green Minis who are out to relieve them of their cash.

Which leads me neatly onto the case of OFT v. Foxtons, in which the OFT are seeking an injunction prohibiting Foxtons from including terms in its contracts with landlords that:

• charge a fee for renewal of a tenancy

• charge a fee when the property is sold to the tenant

The OFT claims such terms are unfair.

IMHO, the OFT case is fundamentally wrong-headed for the following reasons:

(a) A landlord should not be classed as a “consumer” for the purposes of the Unfair Terms in Consumer Contracts Regulations 1999.

( b ) From memory, the Regs do not apply to “core terms”. These are terms governing the subject matter or price of the contract.

( c ) It is repugnant in principle to deprive a company of the benefit of a term which has been agreed to by a person of sound mind.

(d) The situation is not, as some contributors have claimed, analogous with the action against the banks in respect of overdraft charges because,

(i) If a landlord does not wish to pay the % fee provided for in the contract, then they can re-negotiate the fee or go elsewhere. In order to keep their business, I have regularly had to waive or reduce renewal fees, simply because one of my competitors would be only too happy to do the same.

(ii) Banks all charge the same type and level of fee and are huge, faceless organisations. As such, the consumer has absolutely no chance of re-negotiating the over-limit fee. Obviously, this is not the case with a letting agent, where you can invariably speak to someone (usually face to face if required) with sufficient authority to take this kind of decision.

(iii) The legal challenge to the banks’ over-limit charges is based primarily on the principle that damages for breach of contract should be compensatory and not punitive – in other words, if the customer going over their agreed limit only costs the bank £1, then that is what they should receive and not the £35 or so, they presently charge.

(e) Essentially, the OFT v. Foxtons case seems to be based on the principle that landlords are of such utter, bovine stupidity that they cannot look after their own business interests and that they need Big Brother to intervene on their behalf. In short, it is a further step towards making society even more infantile than it already is. Am I alone in finding that slightly worrying? I hope I am not alone in believing that people should be encouraged to take more responsibility for their own interests, not less.

(f) It is ill-considered on economic grounds for the following reasons:

(i) I work for a small, independent agency. Approx 30% of our income comes from renewal fees. If the OFT wins the case on the renewal fees point, all agents will be barred from charging those fees and I can envisage our firm having to either close down or shed staff if our turnover is reduced by such a dramatic amount.

(ii) The business model and level of fees charged by agencies is based on annual receipt of a certain level of fee income received from all sources. If renewal fees are declared verboten, then eventually, agents will seek to make up this lost income stream either by charging higher letting fees or charging higher admin fees to tenants and so a form of equilibrium will return (in other words, we will be back to square one). Unfortunately, by that time, those smaller agents like ourselves will have been unable to absorb the dip in turnover and will probably go to the wall. Ironically, it is often the small, independent agencies that give the most professional service and offer the fairest terms to landlords.

(iii) The loss of renewal fees will have to be made up by way of increasing the volume of lettings contracted. More volume = less time on each transaction = more mistakes = poorer quality of work.

(iv) Without an incentive to contract renewals, some less ethical managing agents might well be tempted to engage in underhand tactics that force tenants to move out rather than to renew. I know of at least one unscrupulous agency that used to do this in any event simply because they received 10% for a letting fee, but only 5% for a renewal fee.

Hence, I find myself in the rather odd position of wishing Foxtons all the best with their case.

Firstly I suspect you are pitching to the wrong audience, this is a board of people who care little of the welfare of letting agents

Secondly I strongly contend your opinion.

The crux of the OFT rulling is that fees should not exist beyond the term of the contract which is the case (I am presently arguing with an agent over this very issue) The problem it is creates is pressuring LL's to evict tenants after the term to ensure better terms with the EA.

Anybody regardless of type (consumer or business) should be allows to negociate terms at the end of a contract and before starting a new one.

Second issue is that a private LL is not a registered business and could (again a key part of the OFT view) be considered a consumer buying a service

I would love you use different words but you sir are a leech

Edited by Matt Henson

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Firstly I suspect you are pitching to the wrong audience, this is a board of people who care little of the welfare of letting agents

Secondly I strongly contend your opinion.

The crux of the OFT rulling is that fees should not exist beyond the term of the contract which is the case (I am presently arguing with an agent over this very issue) The problem it is creates is pressuring LL's to evict tenants after the term to ensure better terms with the EA.

Anybody regardless of type (consumer or business) should be allows to negociate terms at the end of a contract and before starting a new one.

Second issue is that a private LL is not a registered business and could (again a key part of the OFT view) be considered a consumer buying a service

I would love you use different words but you sir are a leech

Firstly, begging your pardon if I don't subscribe to the popular consensus on the board and I decline to join in with the mutual fur stroking exercise by pointing out a few unpalatable truths.....

Secondly, the OFT is not empowered to give a "ruling" - they are not a judicial body (ie: a court) hence the need for High Court proceedings to determine the matter.

Thirdly, if a contractual term providing for fees to be payable beyond the term of the initial letting has been agreed to by the parties, then that, as they say, is that. There is no legal principle that prevents the charging of such fees which are analagous to a royalty. If the landlord doesn't want to pay those fees, then they should say so before they sign the contract and then negotiate amended terms with the agent. If the letting agent won't agree to the amendment, then the landlord is free to take their business elsewhere. It is objectionable that they should agree to pay a fee and then whine about it later. Most landlords would feel extremely aggrieved if their tenant signed a tenancy at £1000pcm and then after they moved in, told the landlord that they believed the rent was unfair and would only be paying £750pcm. What's sauce for the goose is sauce fr the gander.

Fourthly, there is no such thing as a "registered business". Obviously, limited companies have to be listed at Companies House, but businesses can also be run as partnerships, limited liability partnerships, sole traders or unicorporated associations.

I'm not sure how you come to the conclusion that I am a "leech". You know nothing about me, my background, or the business I work for other than what I have posted here. Your poorly aimed insult displays poor manners and such ill-informed ad hominem attacks only serve to diminish the force of your argument.

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Firstly, begging your pardon if I don't subscribe to the popular consensus on the board and I decline to join in with the mutual fur stroking exercise by pointing out a few unpalatable truths.....

Secondly, the OFT is not empowered to give a "ruling" - they are not a judicial body (ie: a court) hence the need for High Court proceedings to determine the matter.

Thirdly, if a contractual term providing for fees to be payable beyond the term of the initial letting has been agreed to by the parties, then that, as they say, is that. There is no legal principle that prevents the charging of such fees which are analagous to a royalty. If the landlord doesn't want to pay those fees, then they should say so before they sign the contract and then negotiate amended terms with the agent. If the letting agent won't agree to the amendment, then the landlord is free to take their business elsewhere. It is objectionable that they should agree to pay a fee and then whine about it later. Most landlords would feel extremely aggrieved if their tenant signed a tenancy at £1000pcm and then after they moved in, told the landlord that they believed the rent was unfair and would only be paying £750pcm. What's sauce for the goose is sauce fr the gander.

Fourthly, there is no such thing as a "registered business". Obviously, limited companies have to be listed at Companies House, but businesses can also be run as partnerships, limited liability partnerships, sole traders or unicorporated associations.

I'm not sure how you come to the conclusion that I am a "leech". You know nothing about me, my background, or the business I work for other than what I have posted here. Your poorly aimed insult displays poor manners and such ill-informed ad hominem attacks only serve to diminish the force of your argument.

I rather thought "leech" was the ideal word to describe individuals who thinks their lifestyle should be maintained for doing little or no work for their money and agreed I don't know you personally but I know your kind and most are of the "Rhynchobdellida" species.

Quick point on business, the way you are treated by the tax man generally determined whether you are considered a business or not and if you want to "tax" your income as a business (i.e. on profits only) you need to be registered at companies house even if you are a sole trader. It's at easy process accountants do it for all their customers, it saves a lot of money. Secondly if your gross revenue is £64,000 you need to VAT registered. Private landlords however are taxed as individuals which in my mind makes them a consumers.

My particular issue with letting agentiss rhynchobdellida is the one I use who agreed no further fees after the intial 12 months period, did not charge them for two years and suddenly decided that because the tenanty had gone in to periods he was now entitled to 18 month of back commision hence my distain for the your species

understanderable don't you think

Edited by Matt Henson

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I rather thought "leech" was the ideal word to describe individuals who thinks their lifestyle should be maintained for doing little or no work for their money and agreed I don't know you personally but I know your kind and most are of the "Rhynchobdellida" species.

My particular issue with letting agentiss rhynchobdellida is the one I use who agreed no further fees after the intial 12 months period, did not charge them for two years and suddenly decided that because the tenanty had gone in to periods he was now entitled to 18 month of back commision hence my distain for the your species

As you are clearly a landlord, your comments castigating those who do "little or no work for their money" strike me as rather hypocrytical. Most of the landlords I deal with (and our firm is in a nice part of town) are the laziest, greediest species of individual one could ever have the misfortune to meet. Nevertheless, you may be an exception to the general rule.

Moreover, you strike me as a reasonably articulate and intelligent person, so perhaps you should re-think your style of written advocacy as not only are such personal attacks impolite (particularly to someone new to the board) but they dilute your arguments and distract the reader.

As regards your dispute with your letting agent. It seems from what you have said above, it seems that you agreed between yourselves that no further fees would be chargeable beyond 12 monthts and they have now reneged on that agreement and begun charging fees. That this is not an issue of a term being "unfair" as such, but is instead simply a dispute over whether or not a term was agreed between the parties. If you have already issued proceedings and are pleading your case solely on that basis, then you will need to amend your Particulars of Claim.

I hope that helps.

Do you see what a nice, non-Leech type person I am? I am even willing to give some free legal advice to a person whose first reaction was to pour vitriol and bile upon me. ;)

Edited by agent46

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As you are clearly a landlord, your comments castigating those who do "little or no work for their money" strike me as rather hypocrytical. Most of the landlords I deal with (and our firm is in a nice part of town) are the laziest, greediest species of individual one could ever have the misfortune to meet. Nevertheless, you may be an exception to the general rule.

Moreover, you strike me as a reasonably articulate and intelligent person, so perhaps you should re-think your style of written advocacy as not only are such personal attacks impolite (particularly to someone new to the board) but they dilute your arguments and distract the reader.

As regards your dispute with your letting agent. It seems from what you have said above, it seems that you agreed between yourselves that no further fees would be chargeable beyond 12 monthts and they have now reneged on that agreement and begun charging fees. That this is not an issue of a term being "unfair" as such, but is instead simply a dispute over whether or not a term was agreed between the parties. If you have already issued proceedings and are pleading your case solely on that basis, then you will need to amend your Particulars of Claim.

I hope that helps.

Do you see what a nice, non-Leech type person I am? I am even willing to give some free legal advice to a person whose first reaction was to pour vitriol and bile upon me. ;)

I does help... but I would hope you see the my replies are laced with a least a little wit? if you want to see vitriol you should go down the board and see what an individual called "SouthSea" throw at me.

The trouble I have and the problem I suspect the OFT takes rather seriously is these extended terms are not explained properly as ARLA suggests is the right process and "hood winking" people is bad terms really is not fair. In the negotiations to sign the finders fee I went through the contract and came across the "small print" which states the year on year fees, I questioned these and agreed verbally that the changes would not apply. I then signed a shedule of agreement that included a finders fee and payment collection fee but not the extended fees, we proceeded on this basis and no charge was made for two six month renewal beyond the original 12. We have decided to sell the property and therefore a periodic tenancy is more suitable as we can issue an S21 at any time (we have the given the tenant a 20% discount a compensation for this situation) and this is where our problems began. So you can see our LA has reneged on the deal.

I have to admit I am not a lazy LL, in fact quite the opposite, happy tenant pay their rent on time every time and I respond to their needs promptly, I even went as far a replacing the boundary fence with a higher one last year because the neighbour was a nuisance (of course this add value to the property but it still keep the tenants happy). I am also a tenant though and there is lies my issue with LA's my LL is quite simply horrible, the LA knows this but still defends their clients actions and they are an LA from the very respectable end of the market

So as you see my overall experience of LA's is either letting agentiss rhynchobdellida or one of general incompetence, you will also see from my posts that I take a fairly neutral stance.

Sorry to tar you with the same brush but I confess I agree with the OFT decsion to pursue the case in court

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The trouble I have and the problem I suspect the OFT takes rather seriously is these extended terms are not explained properly as ARLA suggests is the right process and "hood winking" people is bad terms really is not fair. In the negotiations to sign the finders fee I went through the contract and came across the "small print" which states the year on year fees, I questioned these and agreed verbally that the changes would not apply. I then signed a shedule of agreement that included a finders fee and payment collection fee but not the extended fees, we proceeded on this basis and no charge was made for two six month renewal beyond the original 12. We have decided to sell the property and therefore a periodic tenancy is more suitable as we can issue an S21 at any time (we have the given the tenant a 20% discount a compensation for this situation) and this is where our problems began. So you can see our LA has reneged on the deal.

So as you see my overall experience of LA's is either letting agentiss rhynchobdellida or one of general incompetence, you will also see from my posts that I take a fairly neutral stance.

Sorry to tar you with the same brush but I confess I agree with the OFT decsion to pursue the case in court

(1) I disagree with the general proposition that renewal fees are unfair per se , as there is nothing at all objectionable either legally or morally to two parties to a contract agreeing that if the landlord continues to receive the benefit of tenants sourced by the agent, then the agent is entitled to a fee calculated as a percentage of that benefit. In fact, on the contrary, it is highly objectionable to declare that two individuals are not free to agree a fee structure between them, and that, in effect, one of the parties (the landlord) is too stupid and irresponsible to be trusted to look after their own interests such that they need a group of overweening, self-important interfering busybodies to re-write contracts for them. I believe that if the OFT plead their case on that basis then they will lose.

(2) However, if the OFT's issue is with terms being "unfair" in the sense that they are drafted ambiguously, or drafted in convoluted legalese or are hidden away in reams of small print to such an extent that for the purposes of the regs those terms are "contrary to the requirement of good faith", then they should simply be seeking to have such terms declared unfair unless they are written in plain intelligible English, and on that basis they will probably succeed. That may in fact be their pleaded case, but until it actually gets to a Court hearing or further information is forthcoming, then we won't be any the wiser.

(3) If the issue relates to fees being charged that were never agreed, then that is an issue which is governed by the common law relating to incorporation of terms and should to be decided on the facts, on an individual, case by case basis.

However, from reading the, albeit brief, interweb news stories, it seems that the OFT are of the opinion that it is unfair in principle to charge any form of renewal fee, as discussed in point (1) of this post, above.

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience" C. S. Lewis

Edited by agent46

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(1) I disagree with the general proposition that renewal fees are unfair per se , as there is nothing at all objectionable either legally or morally to two parties to a contract agreeing that if the landlord continues to receive the benefit of tenants sourced by the agent, then the agent is entitled to a fee calculated as a percentage of that benefit. In fact, on the contrary, it is highly objectionable to declare that two individuals are not free to agree a fee structure between them, and that, in effect, one of the parties (the landlord) is too stupid and irresponsible to be trusted to look after their own interests such that they need a group of overweening, self-important interfering busybodies to re-write contracts for them. I believe that if the OFT plead their case on that basis then they will lose.

(2) However, if the OFT's issue is with terms being "unfair" in the sense that they are drafted ambiguously, or drafted in convoluted legalese or are hidden away in reams of small print to such an extent that for the purposes of the regs those terms are "contrary to the requirement of good faith", then they should simply be seeking to have such terms declared unfair unless they are written in plain intelligible English, and on that basis they will probably succeed. That may in fact be their pleaded case, but until it actually gets to a Court hearing or further information is forthcoming, then we won't be any the wiser.

(3) If the issue relates to fees being charged that were never agreed, then that is an issue which is governed by the common law relating to incorporation of terms and should to be decided on the facts, on an individual, case by case basis.

However, from reading the, albeit brief, interweb news stories, it seems that the OFT are of the opinion that it is unfair in principle to charge any form of renewal fee, as discussed in point (1) of this post, above.

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience" C. S. Lewis

Hi again,

I don't think the OFT have an issue with renewal fees, if these are agreed everybody is happy and they renewal contract to contract.

The issue the OFT has with Foxtons and others is that these fees are linked to a third party outside of the LL's control. The issue that OFT has is that the LL has to pay an annual fee to the finding agent for the entire duration the named individuals on the original contract stay in the property regardless of contract, agent or contract status (even to the extent that tenant has bought the house and obviously remains in the property)

The OFT considers that the Foxtons and others contracts do not make this at all clear and that the LL is not made aware that the duration of the term exists for the duration the tenant lives in the property not the duration of the contract; this is a fundamental clause that should be made clear and not tucked away as a badly worded one liner in the small print. This is fundamentally anti competitive as it does not allow you to leave the agent if you are not pleased with the service.

I personally do not object to "reasonable" renewal fees but I do object to be contractually locked in to a contract beyond the term of the contract and locked in to a contract by events outside my control.

I suspect that you as agent happily agree renewal fees with your clients but as you have lost client to the devil (Foxtons) you obviously don't have the same terms as the LL would not be able to leave you.

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Hi again,

I don't think the OFT have an issue with renewal fees, if these are agreed everybody is happy and they renewal contract to contract.

The issue the OFT has with Foxtons and others is that these fees are linked to a third party outside of the LL's control. The issue that OFT has is that the LL has to pay an annual fee to the finding agent for the entire duration the named individuals on the original contract stay in the property regardless of contract, agent or contract status (even to the extent that tenant has bought the house and obviously remains in the property)

The OFT considers that the Foxtons and others contracts do not make this at all clear and that the LL is not made aware that the duration of the term exists for the duration the tenant lives in the property not the duration of the contract; this is a fundamental clause that should be made clear and not tucked away as a badly worded one liner in the small print. This is fundamentally anti competitive as it does not allow you to leave the agent if you are not pleased with the service.

I personally do not object to "reasonable" renewal fees but I do object to be contractually locked in to a contract beyond the term of the contract and locked in to a contract by events outside my control.

I suspect that you as agent happily agree renewal fees with your clients but as you have lost client to the devil (Foxtons) you obviously don't have the same terms as the LL would not be able to leave you.

The agreement to pay renewal fees can be simply stated as "For so long as you receive a benefit from the tenant remaining in the property, then we will receive a commission on that benefit". I fail to see how that is in any way objectionable. The fee is not based in any sense on whether the agent has done any additional work (ie: if the tenancy lapses into a periodic) - it is, simply put, a bit like a "royalty", and indeed that is how I explain renewal fees to new clients.

We have never lost clients to Foxtons mid-tenancy, but have lost (or rather failed to gain) instructions when competing for new instructions or upon re-letting of existing client's property. In short, they have fallen for the "overvaluation" scam and, I am happy to report, frequently regretted doing so.

I have not seen Foxtons terms of engagement, so I cannot comment on whether or not their terms are clear and drafted in plain English. Obviously if they are not, then, as stated in another post, the OFT action may well succeed. However, if the terms are cleary drafted, but the OFT still believe that a clear and unambiguous agreement to pay a continuing "royalty" is unfair and the High Court find in their favour, then a sanctioning of that type of meddling with commercial arrangements would be a very dangerous development indeed in the law. I believe and sincerely hope that their ship of fools is heading for the rocks.

The OFT case is in my view just another symptom of a general malaise in our society, namely a continual and minute official interference in private relationships by bodies of "experts" who believe they know what is best for other people. As a result, as a society, we have gone from being known for our strength of character, our self-reliance and our love of individual freedom to becoming a society largely composed of lazy, helpless, infantile whingers.

Edited by agent46

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The agreement to pay renewal fees can be simply stated as "For so long as you receive a benefit from the tenant remaining in the property, then we will receive a commission on that benefit". I fail to see how that is in any way objectionable. The fee is not based in any sense on whether the agent has done any additional work (ie: if the tenancy lapses into a periodic) - it is, simply put, a bit like a "royalty", and indeed that is how I explain renewal fees to new clients.

We have never lost clients to Foxtons mid-tenancy, but have lost (or rather failed to gain) instructions when competing for new instructions or upon re-letting of existing client's property. In short, they have fallen for the "overvaluation" scam and, I am happy to report, frequently regretted doing so.

I have not seen Foxtons terms of engagement, so I cannot comment on whether or not their terms are clear and drafted in plain English. Obviously if they are not, then, as stated in another post, the OFT action may well succeed. However, if the terms are cleary drafted, but the OFT still believe that a clear and unambiguous agreement to pay a continuing "royalty" is unfair and the High Court find in their favour, then a sanctioning of that type of meddling with commercial arrangements would be a very dangerous development indeed in the law. I believe and sincerely hope that their ship of fools is heading for the rocks.

The OFT case is in my view just another symptom of a general malaise in our society, namely a continual and minute official interference in private relationships by bodies of "experts" who believe they know what is best for other people. As a result, as a society, we have gone from being known for our strength of character, our self-reliance and our love of individual freedom to becoming a society largely composed of lazy, helpless, infantile whingers.

I presume you would have Maggie back tomorrow? ;-)

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Guest anorthosite

Is there anything funnier than watching a landlord and a letting agent fight for the moral high ground? :lol:

Guys, why don't you form a tag team and have a match with a lawyer and a politician?

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I presume you would have Maggie back tomorrow? ;-)

Actually, no. She went too far in the other direction not to mention that frankly she just generally became utterly bonkers in her later years.

However, as regards the way society is heading, I do think my argument has a lot of weight. The evidence can be seen everywhere, from teachers not being able to exercise any professional judgement in their teaching activities because they are subjected to endless interference, through to what is popularly termed "Health and Safety Nazism" whereby there is an assumption that the removal of all risk from society, at the expense of involvement, experience and adventure is a Good Thing. I believe this OFT "unfair terms" issue is just another nail in the coffin of the ability of people to think, speak and act for themselves. What they are, in effect, saying is that landlords should never have to read a contract or decide for themselves whether a term is acceptable to them because the all-knowing, omnipotent, caring OFT will have already done the thinking and speaking for them.

However, perhaps that is what our lords and masters desire for us. What could be more perfect as far as they are concerned than a docile and mute populace who have become utterly reliant on the State and its agencies to intervene in and manage the most trivial aspects of their lives. To be honest, I find that slightly sinister and very depressing.

Never mind, if you fail to be worried by these developments, then by all means, take your soma, switch on your enormous flat screen TV and then gaze slack-jawed for the rest of your bovine existence at the perfect HD pictures vomited at you across 129 channels. Happy days! :)

Edited by agent46

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Never mind, if you fail to be worried by these developments, then by all means, take your soma, switch on your enormous flat screen TV and then gaze slack-jawed for the rest of your bovine existence at the perfect HD pictures vomited at you across 129 channels. Happy days! :)

Far too dull, I shall be spending the weekend blowing bunnies away with my 12 bore.... very PC of me!

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Quick point on business, the way you are treated by the tax man generally determined whether you are considered a business or not and if you want to "tax" your income as a business (i.e. on profits only) you need to be registered at companies house even if you are a sole trader. It's at easy process accountants do it for all their customers, it saves a lot of money. Secondly if your gross revenue is £64,000 you need to VAT registered. Private landlords however are taxed as individuals which in my mind makes them a consumers.

I don't think there is a single point in this paragraph that is correct. Save for the VAT threshold, but that is incorrect in that Matt Henson implies that it applies to letting property. It doesn't.

I am with OP. A Landlord is not a consumer, he is a business.

Even if he were not a business, I don't see why the LA should not continue to derive income whilst L continues to derive benefit from T who was introduced by L.

My sympathies in this case lie with Foxtons - not withstanding that they are a lying bunch of incompetant shysters with no relevant property experience. And the terms of their contracts are punishing.

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Even if he were not a business, I don't see why the LA should not continue to derive income whilst L continues to derive benefit from T who was introduced by L.

I don't necessarily disagree what I do disagree with is the underhand way these terms are put in to practise. In my case with a London agent, we agreed that rather than negotiate down the finders fee we would waive the future renewal fees, this was accepted and the schedule stated no further fees other than those agreed (rent collection etc.).

Two year later and a change of management, they came back to us and told us that by signing the standard T&C's we had agreed to the renewal fees and that they were payable on the whole period. Clearly two years down the road with no charges made to date we had no opportunity to change the situation so we continue to dispute the claim. The second issue would be when the LL no longer benefits from the tenant, i.e. he/she sell the property, these I suspect are the issues the OFT has not the fees themselves. It is an issue of clarity and whilst Agent46 may argue that if people are too stupid to check these documents they deserve what they get but it may well be the case that they are too stupid and the law is there to protect the average punter not the expert. In my case we checked, we agreed and the agent went back on that agreement of course I would never call myself stupid! ;)

Edited by Matt Henson

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The other thing I would add is that the whole property industry has made its self fat in a bubble market. Bubble markets are irrational and people start to believe their own value and hype where it does not exist.

One day soon LA and AA's are going to have to work for living and when that day come the good ones (of which there are many and who provide a good and valuable service to LL's, tenants and home buyers/sellers) will thrive and the freeloaders will not. As far as I can see the only value many LA's/AA's offer (based on very personal experience) is to take photos of you house and stick it on rightmove then perform an admin role there after. Arguing that 7-9% of annual rent a year for doing that is fair value is a little rich I would suggest costs or not especially when it really only exists in the bubblisious London market.

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The other thing I would add is that the whole property industry has made its self fat in a bubble market. Bubble markets are irrational and people start to believe their own value and hype where it does not exist.

One day soon LA and AA's are going to have to work for living and when that day come the good ones (of which there are many and who provide a good and valuable service to LL's, tenants and home buyers/sellers) will thrive and the freeloaders will not. As far as I can see the only value many LA's/AA's offer (based on very personal experience) is to take photos of you house and stick it on rightmove then perform an admin role there after. Arguing that 7-9% of annual rent a year for doing that is fair value is a little rich I would suggest costs or not especially when it really only exists in the bubblisious London market.

The charge is not necessarily based on how much work has been put in but on the results achieved by that work. It's a bit like when you take your car to a garage and the mechanic sorts out the problem with just a twist of a screwdriver. You are not paying solely for his time or effort, but for the benefit you receive.

It's a fact of life that market forces dictate that landlords need the services of an agent to such an extent that they are willing to part with anywhere between 6% and 12% of the annual rent to secure those services.

IME, the main reason landlords sometimes find it difficult to let their own property is that they don't know how to conduct themselves on a viewing. They can be roughly divided into 3 categories:

1 ) The Peasant: turns up to the appointment unshaven and wearing dubiously stained brown trousers, hanging over which is a huge belly. Then takes ten minutes to open the door because he has a bunch of 200 unlabelled keys. Communicates in mono-syllables or grunts. Breathes noisily through his mouth and may even pick his nose.

2 ) The "Location Location Location" Couple: Newbie buy-to-letters. Come across as pushy, greedy and slightly neurotic. Bought the property after they became experts by watching the telly. She gets offended and angry if the tenant tries to negotiate on the rent because the flat was bought for her as a pet project by "hubby" as compensation for him not wanting to have a baby yet/IVF failing to work/his affair with a colleague/the shame of being the only couple at their friend's dinner party without a second property (delete as applicable). Sometimes also make the mistake of trying to befriend the tenants.

3 ) The Desperado: Worried how he is going to make his next mortgage payment, he goes overboard, follows the applicants around the property, babbling incessantly and ends up talking himself out of the deal. Tenants come away from the appointment knowing everything about the property, even down to the name of the man who laid the carpet, but also decidedly wary of the landlord.

Edited by agent46

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It's a fact of life that market forces dictate that landlords need the services of an agent to such an extent that they are willing to part with anywhere between 6% and 12% of the annual rent to secure those services.

IME, the main reason landlords sometimes find it difficult to let their own property is that they don't know how to conduct themselves on a viewing. They can be roughly divided into 3 categories:

1 ) The Peasant: turns up to the appointment unshaven and wearing dubiously stained brown trousers, hanging over which is a huge belly. Then takes ten minutes to open the door because he has a bunch of 200 unlabelled keys. Communicates in mono-syllables or grunts. Breathes noisily through his mouth and may even pick his nose.

2 ) The "Location Location Location" Couple: Newbie buy-to-letters. Come across as pushy, greedy and slightly neurotic. Bought the property after they became experts by watching the telly. She gets offended and angry if the tenant tries to negotiate on the rent because the flat was bought for her as a pet project by "hubby" as compensation for him not wanting to have a baby yet/IVF failing to work/his affair with a colleague/the shame of being the only couple at their friend's dinner party without a second property (delete as applicable). Sometimes also make the mistake of trying to befriend the tenants.

3 ) The Desperado: Worried how he is going to make his next mortgage payment, he goes overboard, follows the applicants around the property, babbling incessantly and ends up talking himself out of the deal. Tenants come away from the appointment knowing everything about the property, even down to the name of the man who laid the carpet, but also decidedly wary of the landlord.

On this I could not agree more.... but there are agents who seem behave in a similar manner... "it's a house look at it, I'm off for a quick smoke"

on this

"The charge is not necessarily based on how much work has been put in but on the results achieved by that work. It's a bit like when you take your car to a garage and the mechanic sorts out the problem with just a twist of a screwdriver. You are not paying solely for his time or effort, but for the benefit you receive."

I would a little pissed if my car breakdown because a single screw came loose, it depends on the skill behind the service, I just secured an offer on the flat I am selling because I personally spoke with the buyer and not the agent, it was amazing, the agent didn't even show up to the viewing, the tenants showed them round and gave the buyers telephone number to me, I did a wonderfully selling job. We lost the first sale because the individual at the agent who was dealing with our property did not understand how you deal with an absent leaseholder. We will still pay our 1.5% agent fees though and this is why I say some agent warrant there fees and some don’t

In all fairness though it was just a poor individual and not the agent as a whole, but I do despair sometimes.

Edited by Matt Henson

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but there are agents who seem behave in a similar manner... "it's a house look at it, I'm off for a quick smoke"

If it works, don't knock it :)

Less is more my friend. IME, it is often better to say nothing and let nature takes its course rather than trying to hustle the tenants. Anyway, from a personal perspective, apart from the fact that being pushy is counter-productive, I would never want to conduct myself in such an undignified fashion.

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If it works, don't knock it :)

Less is more my friend. IME, it is often better to say nothing and let nature takes its course rather than trying to hustle the tenants. Anyway, from a personal perspective, apart from the fact that being pushy is counter-productive, I would never want to conduct myself in such an undignified fashion.

I suppose one should credit the agent for showing up for a smoke in the first place ;)

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I don't necessarily disagree what I do disagree with is the underhand way these terms are put in to practise. Two year later and a change of management, they came back to us and told us that by signing the standard T&C's

So it looks as though you signed a contract that didn't say what you thought it meant. The business was transferred, the new owners looked to see what it actually said, and acted upon it.

That's not underhand. That's perfectly fair - why have a contract if you don't follow its terms?

And it's perfectly acceptable for an EA to state in the contract 'if the T buys the house we get 2% or whatever of gross value, whenever they happen to buy it.' If the LA hadn't introduced the T, you wouldn't have found your buyer. Very fair.

And if you don't think the LA did any work, then what if you hadn't instructed them.

The EA business is structured, financially, so that you pay on results. No sale/letting, then no fee. That's why fees are higher.

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So it looks as though you signed a contract that didn't say what you thought it meant. The business was transferred, the new owners looked to see what it actually said, and acted upon it.

That's not underhand. That's perfectly fair - why have a contract if you don't follow its terms?

And it's perfectly acceptable for an EA to state in the contract 'if the T buys the house we get 2% or whatever of gross value, whenever they happen to buy it.' If the LA hadn't introduced the T, you wouldn't have found your buyer. Very fair.

And if you don't think the LA did any work, then what if you hadn't instructed them.

The EA business is structured, financially, so that you pay on results. No sale/letting, then no fee. That's why fees are higher.

Agree with all the above, which really just re-states my original arguments.

I think Matt's problem is (and I don't mean this as a personal attack on him) is that he has had a rough ride from a letting agent and (separately) a landlord and has become a sort of cross between an avenging angel and a barrack-room lawyer. Most university LL.B courses have a few students who are studying law simply in order to right some perceived wrong done against them (my LL.B course had at least 3 that I can remember). They usually do very badly indeed on the degree course because they tend to filter their view of the law through their own experiences and hence lose objectivity when it comes to interpreting the law.

Although I have not been on this forum very long, Matt does remind me of those people quite a bit. I do wish him the best of luck with his various legal battles though. :)

You also see the same sort of people down at the Royal Courts of Justice - litigants in person conducting their own appeals. There is actually a little community of them that seem to be continually involved in litigation with someone or other. If you have a spare afternoon in London, then spend it observing civil appeals as it's actually quite entertaining. The Administrative Court presided over by Mr Justice Collins which hears appeals against refusals to grant Judicial Reviews of Government Decisions is particularly good, because while he seems to be quite pro-applicant/anti-Government when the applicants are represented by counsel, he doesn't suffer fools gladly at all......you can guess the rest.

Edited by agent46

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Agree with all the above, which really just re-states my original arguments.

I think Matt's problem is (and I don't mean this as a personal attack on him) is that he has had a rough ride from a letting agent and (separately) a landlord and has become a sort of cross between an avenging angel and a barrack-room lawyer. Most university LL.B courses have a few students who are studying law simply in order to right some perceived wrong done against them (my LL.B course had at least 3 that I can remember). They usually do very badly indeed on the degree course because they tend to filter their view of the law through their own experiences and hence lose objectivity when it comes to interpreting the law.

Although I have not been on this forum very long, Matt does remind me of those people quite a bit. I do wish him the best of luck with his various legal battles though. :)

You also see the same sort of people down at the Royal Courts of Justice - litigants in person conducting their own appeals. There is actually a little community of them that seem to be continually involved in litigation with someone or other. If you have a spare afternoon in London, then spend it observing civil appeals as it's actually quite entertaining. The Administrative Court presided over by Mr Justice Collins which hears appeals against refusals to grant Judicial Reviews of Government Decisions is particularly good, because while he seems to be quite pro-applicant/anti-Government when the applicants are represented by counsel, he doesn't suffer fools gladly at all......you can guess the rest.

I don't take offence infact I think you have just about got the meaure of me ;) although I have only ever stood up in court once in my life and many years ago, if you pretend to know a little of the law you tend to frighten most people off and it has generally worked so far. My LL spends her life in court representing herself and forever loses which is daft but there you go. My ex-wife once said I bully with the pen btw I did a degree in physics!

To reply to Telometer, it was agreed in the schedule i.e. the agreement of what was I paying for or not that no further fees would apply and by signing the schedule I agreed to agree to the general terms and conditions. The on going fee was in the general T&C's despite saying otherwise in the schedule, hence my case for dispute.

In the case of selling "T" is not buying the house, somebody else is

Edited by Matt Henson

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The on going fee was in the general T&C's despite saying otherwise in the schedule, hence my case for dispute.

At common law, the general rule in interpretation of contracts is contra proferentum, which means that if there is any ambiguity either within a term or between 2 or more separate, inconsistent terms, the person seeking to rely on the term will have it construed against them. In plain language - you will win.

Vis a vis "consumers", this rule may have also been put on a statutory footing by r.7(2) of the Unfair Terms in Consumer Contracts Regulations 1999 - "If there is any doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail." However, I am not sure whether reg. 7(2) only applies to the interpretation of terms alleged to be unfair for the purposes of Reg.5, or whether it applies to contract terms more generally.

What stage in your case against the letting agent are you at?

Edited by agent46

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Apologies in advance for the length of the post ;)

I work for a letting and management agency and given that a few of our landlord clients have been enticed away from us by Foxtons, there is absolutely no love lost between me and this bunch of chiselling little shysters. However, after reading the comments on this site and other similar websites and in the light of my 12 years experience dealing with landlords and tenants, I have the following comments to make:

...

In defence of managing agents: (or Don Your Flame-proof Pants)

I write from the position of being both a LL and a tenant, and from both points of view the agent is usually a requirement for an equitable coexistence between the LL and the tenant. As a LL I only have one agent at the moment (small independent) and offered a higher, fixed fee for the tenancies to accomodate for the low rental values. IMO, lower-value tenancies can be just as much work as higher-value ones. Giving a bigger portion away to the agent means that the tenant gets much better service. Yes, the yield is lower. But happy tenants cost less in the long run because they stay on until they really have to go somewhere else and they are usually civil in return.

So anyone saying that the agents are leeches is painting over the lines. They may charge too much in certain cases and some of them are definitely rubbish. But that applies to car mechanics, too. I am 100% sure that my tenants will be happy staying where they are. I know that they can pick up the phone for any petty condition and it will be dealt with immediately. Yes, I know because I check with the tenants if they are happy with the service.

Now, I get exactly the same service as a tenant myself, although I rent a MUCH more expensive place. The same thing applies. I can pick up the phone and things just get done.

And now, I prepare for the flames from the losers who can't empathise with anyone else but themselves.

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  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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