NLA welcomes High Court decision on unfair renewal fees

In passing judgment, Mr Justice Mann stated that he found "all the relevant provisions to be unfair for the purposes of the Regulations". He also said that "the renewal commission is severely camouflaged".

In a statement, the Office of Fair Trading (OFT) has said it "expects the letting industry to comply with this ruling, and will take the necessary steps to ensure this where appropriate."

It went on to say that "the charging of repeat renewal commission represented a ‘trap’ or a ‘timebomb’ for consumers.”

NLA Vice Chairman John Socha said: "The NLA has been campaigning on these unfair fees for almost two years. This sends a direct message to letting agents that this lack of transparency must stop.

"Contracts must be clear with provisions which are upfront and ‘plain and intelligible’.

"Mr Justice Mann has not ruled against renewal commissions per se, but has said – in no uncertain terms – that they must not be hidden in the small print. This ruling is most definitely a victory for the NLA and for landlords throughout the country."

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One thought on “NLA welcomes High Court decision on unfair renewal fees

  1. Andrew

    I have read this judgment right the way through. What it says is that, if an agent is going to charge a renewal fee, or rather a fee throughout the life of the Tenancy then this must be made very clear in the Agent’s T’s and C’s. Foxtons were criticised for burying this fact in the small print, not for making the charge in the first place. The judgment also specifically excluded Landlords with more than two properties who the judge described as ‘professional’ and who therefore should be fully aware of these charges. As with so many of these situations this apparent short term victory may well come back to bite. all Agents have to make a reasonable profit, the income from these so called renewal fees contributes to this and if (and it is a big if) renewal fees were to be binned then initial fees would have to be increased to compensate which would hit many Landlords hard if their Tenant, as many do, leaves before the end of the first year.

    Most agents, ourselves included, either collect rent or Manage the property, in which case our fees are collected quarterly (sometime monthly) in advance. Again it is clear that we continue to provide a service and surely no one is expecting us to do that for nothing. I’ll take a bet that words will change but very little else.

    As for reports in some of the Press and some of them in the what might be called ‘serious’ press that Landlords will be able to reclaim millions in fees charged in the past again the judgment specifically rules this out and would, in any case, only result in many Agents going out of business in what are, as everyone knows, not the easiest of times for us all.

    Letting agents generally do a good job for their clients, nothing is perfect as we all know, but the fact that so many Landlords use an Agent to let their property must surely mean that they are, largely, happy to pay their fees and most realise that the so called ‘renewal fee’ is much cheaper than a void and the expense of preparing a property for a new Tenant. Another hollow victory so typical of these recent time

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