You may or may not remember that the 2015 Consumer Rights Act imposes an obligation on letting agents to display details of their fees in their offices and on their websites. I wrote about this here.
Under s83(4) the act states that this 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.
Guidance issued by the DGLC when the act was still a bill said:
Ill-defined terms such as administration cost must not be used.
Enforcement is via trading standard offices (‘the local weights and measures authority”) who are empowered to fine erring agents under a penalty notice after service of a ‘notice of intent’. Assuming the offending wording is not changed.
However notwithstanding this, Foxtons published a fee of £420 on their website which was described as, yes you’ve guessed it, an ‘Administration Fee’.
It always seems to be Foxtons who are the butt of these claims – old Landlord Law Blog lags will remember the claim brought against them by the OFT in 2010. In fact the Foxtons litigation has been very helpful in developing areas of landlord & tenant related law. A couple of other claims have been threatened but don’t seem to have got anywhere but this one will now be a useful authority.
London Borough of Camden v Foxtons Limited: 
The London Borough of Camden (Camden) – one of the few Councils to actively pursue letting agents and seek to enforce the legislation (and good for them for doing it) were unhappy with Foxtons description of their fees as an ‘Administration Fee’ and proceeded to fine them.
Foxtons believed that they had dealt with Camden’s objections by adding an explanatory paragraph, viz
Administration fee: £420 per tenancy.
This is a fixed cost fee that can cover a variety of works depending on the individual circumstances of each tenancy, including but not limited to conducting viewings, negotiating the tenancy, verifying references and drawing up contracts.
This charge is applicable per tenancy, and not per individual tenant.
Camden were unhappy with this though and the case went to the First Tier Tribunal, who accepted the explanatory paragraph and reduced the fine to take account of Foxton’s later compliance.
However Camden were not prepared to accept this and so the matter was referred to the snappily named Upper Tribunal Administrative Appeals Chamber where it came before Judge Levenson on 25 August 2017. You will find the report here.
The Upper Tribunal Decision
The description of the admin charge, decided the Judge was inherently unclear. If the Foxtons wording had said that the administration charge would never exceed £420, that would have been all right. But it didn’t. To quote the Judge:
It is the use of the phrase “can cover” that bothers me. It encompasses the idea of “might not cover” and therefore the wording is not clear that there will be no services (not listed under “Other fees”) which incur or might incur a further charge.
The failure of the First Tier Tribunal to realise this implication amounted (said the Judge) to an error of law entitling him to set aside their decision and impose his own.
The Judge’s decision concerned the amount of the penalty. Giving them a slight credit for trying to resolve the problem (despite the fact that their suggested resolution proved ultimately unacceptable) the penalty was amended to £18,000.
If you are a letting agent make sure that any description of your fees is comprehensive and complete – and do not include any ‘vague element’.
This decision will be very useful for other Trading Standards Offices. You will find the online report here.