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Agents are ripping off landlords by adding commission and not telling them on Fri 31st January, 2014

Estate agents nationwide are burning the pockets of landlords by creepily adding costs to maintenance invoices without the bill-payer knowing, according to property experts.

Property entrepreneur, Will Davies, who heads property maintenance and refurbishment company, singles out London-based agents Foxtons who 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.”

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 have no idea that it is happening.

According to Mr Davies, 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). Making a “secret profit” has always been contrary to Common Law principals but the industry has been slow to expose its own and jeopardise this lucrative source of cash.

The government is looking into compulsory regulation of letting agents but no one is expecting this to come into being soon, if at all. Many agents are members of ARLA (Association of Residential Letting Agents) but that is no guarantee that the agent is not charging a mark up – or getting a “kick-back”.

“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.

“ used to manage property maintenance work around London for Foxtons Lettings Agency. We stopped when they wanted to increase their commission from 15% to 20%.”

“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 scam and we didn’t want to be associated with that,” Davies adds.

But identifying Agents who did not boost their income in this way proved hard. But one Agent, Featherstone Leigh has even started to tell their clients that they don’t do it.

Director, Joanna Hamilton explains “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 sort of practices. 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 those with reputable names, consider this “little bonus” to be legitimate”. has recently launched its own Property Management Division so Landlords for whom it manages properties get access to maintenance and refurbishment services at a discount to their standard rates. By comparison, if these Landlords used a traditional agent adding commission to bills, the landlord would be paying c.30% more per annum for all repairs and maintenance!

Our advice to Landlords. Ask your letting agent the question and get an answer from someone sufficiently senior to know the answer. Check their terms of business and see if they have told you about it and if they have, was it clear to you what they meant? If you are not satisfied – kick up a fuss.

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John Price, Hillgrove PR.

Hillgrove PR

T. +44 (0) 20 3603 0366