This is an update to my first post Will civil claims bankrupt Foxtons, Countrywide and LSL?.
Foxtons, Countrywide and LSL have failed to comply with the Advertising Standards Authority's adjudication about the transparent disclosure of tenants' fees.
After the adjudication, since it was clear and well publicised in the industry, agents were committing fraud until they took the simple steps necessary to avoid misleading their prospective tenants.
Since almost no agents acted on its adjudication, the ASA issued a warning in September that it would take action against any agents failing to comply by 1st November.
When almost no agents had complied on 1st November, the ASA said that it had meant the end of 1st November, i.e. by 2nd November.
The "other fees may apply" links on the listing and details pages lead to a table of fees which includes columns showing the VAT-inclusive price, the VAT-exclusive price and the amount of VAT. These other two columns are redundant and therefore potentially misleading, but I acknowledge that You Move needs to include them to alert consumers indirectly to the misleading practice, still common amongst its competitors, of quoting fees exclusive of VAT.
Inexplicably and contradictorily, some Your Move property listings lead to a table of fees described as the table of fees for all Your Move properties, but others lead to a different tables of fees relating to specific branches or brands.
The tables of fees include extension fees and checkout fee. The OFT's recent draft guidance described extension fees as contractually unenforceable and checkout fees as an aggressive business practice, a criminal offence. The tables of fees are followed by lists of explanations. The compulsory administration fee is misleadingly justified on the basis that it covers the costs of credit checks, tenancy agreement preparation and deposit protection. The administration fees in most tables that I found far exceed these costs; the tenancy agreement is, in any case, paid for separately by the landlord; and the cost of deposit protection, like the cost of check-out, seems not to be a cost that should be borne by the tenant. The renewal fee is presented as giving an advantage to the tenant. It can give an advantage but only in circumstances in which it gives the landlord equal disadvantage, and vice versa. Your Move does not make it clear that fixed term renewal is an alternative to the default which is to let the rental agreement run on. The fee far exceeds the reasonable cost of the work involved, which is to print two copies of the existing tenancy agreement with a new start date, and to arrange signatures.
The ASA has threatened to take action. The only significant action that it can take is to refer offenders to the Office of Fair Trading. The only significant action that the Office of Fair Trading can take is to prosecute. The Property Ombudsman should expel members who persistently ignore its own codes which themselves require compliance with the Code of Advertising Practice and the Consumer Protection from Unfair Trading Regulations. It remains to be seen whether any of these bodies will act promptly, properly and decisively.
This article looks only at tenants' fees and does not address the companies' criminal treatment of buyers, sellers or landlords.
Foxtons, Countrywide and LSL have failed to comply with the Advertising Standards Authority's adjudication about the transparent disclosure of tenants' fees.
Timeline
In March 2013, following a complaint about LSL's subsidiary Your Move, the Advertising Standards Authority adjudicated that agents must disclose any tenants' fees transparently alongside rent in advertisements for rental properties because those charges form part of the price of the property.After the adjudication, since it was clear and well publicised in the industry, agents were committing fraud until they took the simple steps necessary to avoid misleading their prospective tenants.
Since almost no agents acted on its adjudication, the ASA issued a warning in September that it would take action against any agents failing to comply by 1st November.
When almost no agents had complied on 1st November, the ASA said that it had meant the end of 1st November, i.e. by 2nd November.
Foxtons
Foxtons's website, as described in my first post, now discloses its tenants' fees via a link (A) to a link (B) to a PDF in which the fees are not set out clearly. Illegally, none of the fees scattered around this PDF include VAT. Link A says "Tenant fees may apply" which is misleading because, according to Foxtons's terms and conditions, tenant fees DO apply. On listings pages, the price is large, black and bold whilst the link is smaller, not bold, and grey. Also it is not configured to behave like a link so that, for example, its appearance does not change when the cursor is placed over it. In rental property detail pages, the rent is large bold and white whilst the link is half the font size, not bold and grey.Countrywide
Countrywide has numerous subsidiaries. Hamptons's website, for example, now includes a link to a list of fee descriptions but none of the amounts are disclosed. Propertywide makes no mention of fees at all.LSL
LSL has numerous subsidiaries.Your Move
Many use Your Move's listings website. In listings and rental property detail pages this includes the tenant arrangement fee for a single tenant inclusive of VAT, which is certainly compulsory, and a link saying "other fees may apply". The rent is presented in large bold test. The rest of the text is less than half the font size and not bold.The "other fees may apply" links on the listing and details pages lead to a table of fees which includes columns showing the VAT-inclusive price, the VAT-exclusive price and the amount of VAT. These other two columns are redundant and therefore potentially misleading, but I acknowledge that You Move needs to include them to alert consumers indirectly to the misleading practice, still common amongst its competitors, of quoting fees exclusive of VAT.
Inexplicably and contradictorily, some Your Move property listings lead to a table of fees described as the table of fees for all Your Move properties, but others lead to a different tables of fees relating to specific branches or brands.
The tables of fees include extension fees and checkout fee. The OFT's recent draft guidance described extension fees as contractually unenforceable and checkout fees as an aggressive business practice, a criminal offence. The tables of fees are followed by lists of explanations. The compulsory administration fee is misleadingly justified on the basis that it covers the costs of credit checks, tenancy agreement preparation and deposit protection. The administration fees in most tables that I found far exceed these costs; the tenancy agreement is, in any case, paid for separately by the landlord; and the cost of deposit protection, like the cost of check-out, seems not to be a cost that should be borne by the tenant. The renewal fee is presented as giving an advantage to the tenant. It can give an advantage but only in circumstances in which it gives the landlord equal disadvantage, and vice versa. Your Move does not make it clear that fixed term renewal is an alternative to the default which is to let the rental agreement run on. The fee far exceeds the reasonable cost of the work involved, which is to print two copies of the existing tenancy agreement with a new start date, and to arrange signatures.
Other brands
Not all LSL's brand use Your Move. Marsh & Parsons, for example, does not disclose the tenants' administration fee with the rent, only providing a link to a page with fees all of which are VAT-exclusive. Intercounty too only links to a fees page which quotes fees as numbers with no mention of VAT. A note near the top reveals that they, too, are VAT-exclusive.
Conclusion
The ASA's adjudication said clearly that a link to non-optional fees would be insufficient and draft guidance issued by the Office of Fair Trading recently concurred. Despite some effort by Your Move, neither Foxtons, Countrywide nor LSL are compliant with the adjudication or with the Consumer Protection from Unfair Trading Regulations. All firms, therefore, continue criminally to mischarge and to accumulate civil liabilities. Consumers should refuse to pay, or they should demand refunds for, improperly disclosed fees.The ASA has threatened to take action. The only significant action that it can take is to refer offenders to the Office of Fair Trading. The only significant action that the Office of Fair Trading can take is to prosecute. The Property Ombudsman should expel members who persistently ignore its own codes which themselves require compliance with the Code of Advertising Practice and the Consumer Protection from Unfair Trading Regulations. It remains to be seen whether any of these bodies will act promptly, properly and decisively.
This article looks only at tenants' fees and does not address the companies' criminal treatment of buyers, sellers or landlords.
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