ARLA is continuing to advise letting agents not to use the term ‘administration’ in their fee schedules.
Confirmation from managing director David Cox has come after a legal case in which Foxtons was effectively told by a judge that it could use terms such as “administration fee”, provided it explained what the charge covered.
In the case, reported yesterday on EYE, it is understood that Camden Council will be appealing the decision, believing that Foxtons’ explanation is too general and against the intention of the law.
Yesterday, Cox told EYE: “In discussions with Camden Council since the introduction of the fee transparency rules in May 2015, ARLA has argued against their interpretation that each item of a fee needs to be listed separately (such as separate fees for referencing, contract negotiation and Right to Rent checks).
“Therefore, we are pleased Judge Lane has agreed with our view that bundling the fees together under a clear heading, with an easy to understand explanation, is acceptable.
“However, this is only one judge’s ruling which may be overturned if the council chooses to appeal, and in any event it does not set legal precedent.
“Therefore, ARLA remains of the belief that agents should not use the word ‘administration’ in their fee schedules.
“The Government guidance and our own Primary Authority Assured Advice said not to use the word, which is why when we created the ARLA Fees Template, we suggested using terms like ‘Tenancy Set-Up Fee’ together with a full and clear explanation of what services are provided for the fee.”
Comments (10)
ARLA website: “Applications are also subject to a one-off non-refundable £50.00 application fee”. No explanation.
Possibly, but Misleading omissions is also open to interpretation and possibly where Camden Council could argue against the intention of the law. Only a Higher Court will be able to give a definitive ruling. For one argument is that “admin fees” is a catch all and a fee a consumer is being charged even if that service is not provided. Fees are supposed to be transparent and easy for the consumer to understand. Admin in general terms is the fee for time spent processing an application. Foxtons have tried to say it does not cover just time, but other work like viewings etc. OK we will assume that is OK, however if the tenant can show that work was not actually provided = open to argument and charged a fee for a service not provided and hidden from view! Normally the landlord is charged to find the tenant!
Foxtons were caught with their pants down, did nothing for ten months and then tried to fire fight the situation. Not having been present at the hearing one is left to ponder on what was actually argued, however it has been accepted in court that guidance given and ignored, doesn’t help the defendant such as …. “The Government guidance and our own Primary Authority Assured Advice said not to use the word, which is why when we created the ARLA Fees Template, we suggested using terms like ‘Tenancy Set-Up Fee’ together with a full and clear explanation of what services are provided for the fee.”
Only an appeal is going to put the situation into its correct context.
I cant see why foxtons didnt get 10 potential tenants in the dock and ask
‘do you know what an admin fee might be?’
Case closed.
Camden Council clearly are nuts. fruit cake.
Foxtons displayed the cost for tenants called it a fee of whatever description – the understanding for any normal person would be they have to pay £x fee even if its called an “admin fee” or a “tenancy set up fee” or “cost to a tenant taking on a property fee” or simply “fees”. Its not confusing or hard to understand Shirley.
Clearly whatever Letting agents do at present they are going to get slammed or put in the slammer. its a no win for agents at the moment.
Public and govenment No1 enemy it appears. Soon it will be a criminal offence to even open a office an make a profit but still have to provide a free referecing service to tenants, showing over properties and free complaints system and carry out right to rent checks but low betide any agent making a profit – and dont ever forget that you have criminal sanctions over our heads now when many other areas of business do not.
‘tenancy set-up fee’ is no more or less descriptive than ‘admin fee’, so it will make no difference. Let’s not get bogged down in such distractions just because a council has lost its mind (and lost).
In fact there is not obligation to give each fee a label at all so the label does not matter. The requirements are clearly listed in section 83. The important one, as Foxtons has learned is the description.
I cant see why foxtons didnt get 10 potential tenants in the dock and ask
‘do you know what an admin fee might be?’
Case closed.
agreed this is. Great news for agents.
No, now you have to put a disclaimer on details:
We may charge you for services including viewings, having a chat, going to the toilet on way to viewing and buying a sandwich. If i have missed anything, the jobs worth at camden council will report me and spend £50k on a legal bill to get £12k off you.
If i was foxtons i would blame Arla for not advising their members properly.
Hi Property Eye..why not call camden council and do some investigative journalism to see why they feel it is so important..
it was only a year or two ago we didnt even have to put the fee anywhere.
I remember it well,,tenants didnt used to ask how much we charged to set a tenancy,,they just paid what we wanted as they never moan…. #real world
This is great news for agents.
Now we can advertise we have ‘no admin fees’ and get the whole world off our backs 😉