For those who are interested in such things, the OFT (Office of Fair Trading, but OFT is easier to type) has published is quarterly report on cases on unfair terms (as per the Unfair Terms in Consumer Contracts Regulations 1999) for October to December 2005. One featured contract term, rightly squashed by the OFT, caught my eye, I quote:
“This term provided that, in the event of a sale of the property arising directly or indirectly out of the letting to the tenant, the landlord was liable to pay a commission to the agent. This was unfair for the following reasons. The future sale of the property was unlikely to be in the contemplation of the landlord at the time he entered into the agreement. If the landlord subsequently decided to sell the property to the tenant, he would have already paid for the services with which he had been provided. It was unfair to seek a bonus for a possible future event in circumstances where the agent had provided no correlative service.”
The creative use of contract terms to swell the coffers is a well known ploy, but landlords will be pleased to know that the OFT have put the kibosh on this one at least.
The ‘how changed’ section of the report goes on to say
“Now the agent merely offers an obligation free valuation of the property. The new term also states that sale of the property would be subject to terms and conditions of a new agreement.”
So now you can sell your property to your tenants, and not pay a penny to your agents. Well, probably.