Landlords still being hit by unfair terms from letting agents

City lawyers are urging both letting agents and consumer landlords to check the terms of their agreement 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 they 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."

For more information please contact Peter Sutherland.