The letting agent-landlord relationship - a dangerous liaison?

The letting agent-landlord relationship - a dangerous liaison?

How transparent should letting agents be about income derived from their agency relationship with a landlord? Chris Haan, senior solicitor in the international and group claims department at Leigh Day, discusses his firm’s planned group action against Foxtons over hidden fees and charges.

What is the basis of this potential class action?
Leigh Day is looking to bring a group court case against Foxtons for landlords who have used Foxtons either just to let, or to both let and manage, their property. The aim of the case is to get a refund for what we claim are hidden fees and charges and for alleged overcharging for work done by contractors.
Letting agents owe landlords fiduciary duties that include:
  • a duty not to make any profit or income from the agency relationship without the landlord’s fully informed consent; and
  • a duty of loyalty, such that the letting agent must not let their interests conflict with the interests of the landlord without the landlord’s fully informed consent.

The claim involves allegations that:

  • Foxtons takes commissions and fees from contractors (such as for repairs, cleaning and inventory and gas safety checks) without landlords’ informed consent—we have seen evidence that Foxtons takes a 25-33% mark-up on contractors’ fees;
  • Foxtons took various fees from tenants without the landlord’s informed consent—for example, it appears that Foxtons charges both landlords and tenants a fee of £420 including VAT for arranging a new tenancy agreement to be printed and signed (a total of £840 inc VAT);
  • Foxtons uses contractors who charge much more than the market rates, in breach of their duty

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