Ruling favours owners of property to rent in London
Landlords in charge of property to rent in London and the south-east have been favoured by a High Court decision relating to annual renewal fees with Letting Agents.
To renew tenancy agreements, landlords generally have to pay around 11 per cent of their annual rent to agents - but this practice was questioned by the Office of Fair Trading (OFT) and taken up in court.
According to the National Landlords Association (NLA), in passing judgment, Mr Justice Mann said he thought "all the relevant provisions to be unfair for the purposes of the regulations" and suggested that "the renewal commission is severely camouflaged".
Responding, the OFT said that it expects the lettings industry to be more transparent, although it must be emphasised that renewal commissions have not been completely prohibited.
John Socha, vice chairman of the NLA, said the ruling "sends a direct message to Letting Agents that this lack of transparency must stop" and that contracts must be plain and intelligible.
The ruling could be beneficial to tenants of property to rent in London too, as landlords may not be so tempted to increase rents if they are clear on what fee they owe Letting Agents.
Written by Martyn Glynn
Published 10th July, 2009
© 2009 Estates IT Limited
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The High Court announces its verdict on tenancy agreement renewal fees between landlords and lettign agents.