According to property entrepreneur, Will Davies, who heads property maintenance and refurbishment company Aspect, some agents are routinely increasing Landlord's bills by requiring a commission on maintenance work that they book in through their property management service.
‘Basically some letting agents milk their clients by charging them a fee to manage the property and then they take an additional commission from the maintenance companies they use so their clients end up paying more than they should be on top of the charges they are already paying for the service,’ he said.
He pointed out that agents are supposed to mention these ‘extras’ in their Terms of Business but, if they do, it is usually tucked away in the small print and their landlords often have no idea that it is happening.
He believes that any agent who does this and does not make this clear to their clients is in breach of industry codes and the proposed guidelines from the Office of Fair Trading (OFT).
And he claims that even although many agents are members of the Association of Residential Letting Agents (ARLA), this no guarantee that the agent is not charging a mark up.
‘Many letting agents are also a member of a recognised ombudsman scheme but this only provides a system of redress after things have gone wrong for individual clients who complain. It does not make its members be up front about these charges in the first place or have any powers of enforcement,’ added Davies.
He also pointed out that some agents have been increasing the commission they charge. ‘We took a policy decision that we would not do work for any letting agents that wanted to charge a commission as we knew their clients weren't aware of this particular practice and we didn't want to be associated with that,’ Davies explained.
Other more up front agents make it clear what they are doing. Agent, Featherstone Leigh, has even started to tell clients that they don't charge commission. ‘Historically this has been a nice little earner for many of our competitors but the industry needs to move out of the dark ages and treat consumers fairly. There should be no room for these sorts of practices,’ said director, Joanna Hamilton.
‘Landlords, many of which do not live in the area rely on their agent to look after their best interests and it is a great shame that many agents, even some with reputable names, consider this little bonus to be legitimate,’ she added.
Aspect’s advice to landlords is to ask their letting agent what they do and to check their terms of business.
