UK Landlord Forum / Life

I have had the misfortune of dealing with Foxtons for almost two years and it feels like I am going through an acrimonious divorce. This week I am now dealing with what I feel is harassment (continued unwanted contact despite saying I do not want to be contacted) about so called renewal fees once the tenancy expires. I feel the agent is quite aggressive. But onto the meat.... Foxtons are trying to charge a renewal fee for what will become a periodic tenancy. I have dispensed with the full management services as both myself and the tenants felt it was well below expected service of a nationwide letting agent of Foxtons standing. We have discussed matters between ourselves without any involvement from Foxtons to do with this matter. In the contract, Foxtons state that the renewal fee needs to be paid up front before the existing AST expires. Firstly, I am unable to understand how you would charge for a periodic tenancy up front unless you have a crystal ball to predict how long it will run (& if you can do that then I feel you are in the wrong industry!). My tenants could opt to stay 5 days or 5 months or 5 years thus making the calculation of a fee for a periodic tenancy unworkable. As this is the case Foxtons state that the renewal will be calculated on the original 2 year AST basis. The agency also states in their contract that the renewal fee is non-refundable so in the case of a stay for less than 24 months in a periodic tenancy there is no clawback for the renewal commission. This would hardly seem fair if they want to quite possibly hammer you for 2 years commission but the tenants may not stay that long. For example, if the tenants only stayed a month then the commission generated would equate to nearly 180% which is far in excess of the original tenancy commission fees paid of 12% plus VAT. This would in effect make the fees paid under the contractual terms unfair and unreasonable. Additionally, there have been several court cases such as Foxtons Ltd Vs Pelkey Bicknall, in which the Office of Trading Standards took part in to discuss the charging of commission on sales. Foxtons lost this case. The underlying concept (as stated by Lord Neuberger) in this case states that the agent needs to be the "effective cause" (i.e. actually do some work) of a commission generation (whether this be in sales or even lettings) and whether it is specifically written or implied in the contract. (There are several other cases which you can find that have had similar results if you search for them.) In my case, the agent has not taken part in any discussion and has not done any work or services with regards to the renewal except try to excessively contact me and ignore my request not to do so. The only work they would do is generate an invoice for effectively an equivalent of 3 months rent which is over £3K. As my boyfriend says "So I could generate you an invoice for renewal commission and do nothing, so I'm not an expert, but that would seem to me to be extortion?" It would appear to me that Foxtons feel if they excessively / aggressively contact the landlord then they will capitulate and fall in with what seems to me unfair terms of business with no effective cause.

I had hoped for a clean break from this agency after my experience of their services and the initial mess that they made of the contract from the start. Unfortunately, they seem determined to drag the agony of dealing with them on for potentially years. If I'm really unlucky this problem could reappear in another years' time if they are continuing to be determined to grind every last penny out of the unfortunate landlord. They have already been paid, in my view, an excessive commission to cover two years of AST contract. I understand that I am not the only landlord who feels this way. As we now have the potential abolition of fixed term contracts in the government's white paper, I can foresee lettings agents attempt to charge landlords in this manner in the future. Tenants have already had an overhaul of the fees charged by lettings agents. It is high time that fees charged to landlords were revised too.

I'd refer the agent to the case with their name in it and ask on what basis they think that they can make the charge for doing no work, when they have already given undertakings not to do that.

I realise this is a "let's talk about..." but we prefer problems over discussion.

However, if this is a real ongoing problem then a simple reality check is needed... you are effectively commencing, or some way through, dispensing yourself of the 'services' of this Agent. So they are now against you - your enemy. They always saw you as an easy mark anyway, but now you're just someone they can try to exploit for one last big score! If you capitulate then it's the easiest money they've ever 'earned', so expect them to try really, really hard for it - a few phone calls or emails is nothing compared to the effort - supposedly - required to perform a full management service. Expect harassment. Expect pressure. Expect determination, to a point. But the old adage stands... possession is nine tenths of the law and as long as you have the money and they have no means of simple taking your money (rent going to them before being sent to you / Direct Debit) then you're good.

You don't even need to do anything... the effort to take you to Court is all on their side. Whether they will or not is unknown at this stage, but I don't see - yet - why you would feel the need to do anything if you've read up on the Terms of Business you signed and are happy you want to go the route you've decided upon. That said, if you signed the Terms of Business and are effectively ignoring those because they're "unfair"... hmm... weren't they unfair when you signed them? Or wasn't that thought about as it didn't matter back then - or was what you were signing not read (maybe because you weren't given chance... or couldn't be bothered). It does deserve some thought, possibly... can we all go around signing our name to things then deciding we didn't really want that... OK, let's assess them again (or for the first time)... now we can see they're "unfair" or in a grey area... all this talk about lack of clarity around renewal commission when going to an unknown duration SPT... yes, it makes sense to a normal person... but the lack of clarity is invented. The clarity exists and is written down, isn't it? They want two years, don't they? They take the amount you agreed they would take... what you do with the Tenant then is up to you. It doesn't seem unclear... but it does fall into the "this Tenant is mine" attitude Agents always have.

This particular Agent does have a terrible reputation, though, right?

Should Landlords have fee softening? Who cares. Clever and competent Landlords don't use Agents, so it's kinda irrelevant. In a free market the rates are set by competition, and negotiation. An Agent won't allow their lunch to be eaten without a fight. The money still has to come in. It would just come in from somewhere else (still you) - so if you don't appreciate that aspect then you'd be disappointed by any legislation... or maybe when there are no Letting Agents left. 

Just ignore everything from them,but if they really get on your nerves tell them you are making a complaint to the Ombudsdman.In order to do this you will have had to go through Foxton's in-house procedure,but I expect you have done this to no avail? The Ombudsman service is pretty useless,but companies don't like being reported to it.