Pictured: Peter Sutherland
City lawyers are urging both letting agents and consumer
landlords to check the terms of their agreements to make sure that
they are fair.
Both sides could lose out for different reasons if they are
not.
Landlords could find themselves out of pocket, while letting
agents could find themselves coming under scrutiny from the Office
of Fair Trading (OFT).
Peter Sutherland, at Andersons Solicitors in Nottingham, said:
"The OFT is determined to crack down on unfair terms and the
Property Ombudsman has just issued a code of practice for letting
agents to follow.
"The code states that letting agents cannot include sales
commissions in their agreements with landlords. Nor can they charge
commission where the landlord instructs someone else to renew the
lease."
Last year, the OFT successfully pursued an enforcement case
against Foxtons for breaching the Unfair Terms in Consumer
Contracts Regulations 1999 (UTCCR).
Foxtons agreed to amend some of its terms concerning sales and
commissions after the High Court ruled that they were unfair.
The OFT estimates that its enforcement order has provided an
annual benefit of at least £4.4m for landlords that use
Foxtons.
However, although there is no longer a problem with Foxtons, the
OFT is concerned that other letting agents seem to be unaware of
the High Court ruling and are still offering terms that may be
unfair.
Peter said: "The Foxtons case should have been a wake-up call
for both landlords and agents but despite this, consumer landlords
are still being presented with potentially unfair terms in
contracts with some letting agents.
"Agents should be aware that the Property Ombudsman will now be
carrying out comprehensive monitoring procedures to ensure the code
is being followed. This will involve mystery shopping exercises and
customer satisfaction surveys."