Foxtons Ordered to Pay £18,000.00 in the case of London Borough of Camden v Foxtons Ltd [2017] UKUT 349 (AAC)
This was the first appeal in this jurisdiction to come before an Upper Tribunal and the crux of the appeal brought by the London Borough of Camden was whether the revised description of Foxtons fees complied with the Consumer Rights Act 2015.
The Consumer Rights Act 2015 (‘the Act’) requires all letting agents in England and Wales to publicise details of their fees. Section 83 of the Act came into force on 27 May 2015 and provides:
83(1) A letting agent must, in accordance with this section, publicise details of the agent’s relevant fees.
(2) The agent must display a list of the fees –
(a) at each of the agent’s premises at which the agent deals face to face with persons using or proposing to use services to which the fees relate, and
(b) at a place in each of those premises at which the list is likely to be seen by such persons.
(3) The agent must publish a list of the fees on the agent’s website (if it has a website).
(4) A list of fees displayed or published in accordance with subsection (2) or (3) must include –
(a) a description of each fee that is sufficient to enable a person who is liable to pay it to understand the service or cost that is covered by the fee or the purpose for which it is imposed (as the case may be),
(b) in the case of a fee which tenants are liable to pay, an indication of whether the fee relates to each dwelling-house or each tenant under a tenancy of the dwelling house; and
(c) the amount of each fee inclusive of any applicable tax or, where the amount of a fee cannot reasonably be determined in advance, a description of how that fee is calculated.
Under section 87 of the Act local authorities have duties to impose penalties on agents who fail to comply with the provision of section 83 referred to above. The penalty will be an amount for the local authority acting to determine but cannot exceed £5,000.00 for each breach.
The First-tier Tribunal decided that there is nothing wrong with using the expressions “administration charge” or “administration fee” provided that it is accompanied by a description that is sufficient to enable a person to understand the service or cost that is covered by the fee or the purpose for which it is imposed. The term “administration charge” or “administration fee” alone will not achieve compliance.
The First-tier Tribunal then explained that a person who enters the premises of a letting agent as a prospective tenant needs to know precisely how much he or she will be required to pay in order to be installed as a tenant. A comprehensive list of fees achieves that aim.
Judge Leveson of the Upper Tribunal found that Foxtons revised description of fees was non-compliant with the Consumer Rights Act 2015 and imposed a penalty of £4,500.00 for each of 4 breaches made by Foxtons totalling £18,000.00.
We have previously published articles on the obligation for agents to publicise their fees and this case is a reminder for agents of the importance of compliance and the potential consequences for breaching the requirements.
