Foxtons falls foul of Tenant Fees Act after demanding prohibited payment
Firm claimed its £750 'agency fee' was allowed because the tenancy was a short-let, but Tribunal judge disagreed.
Foxtons has fallen foul of the Tenant Fees Act after a tribunal found that it had charged three tenants a prohibited fee of £750 as they moved into a property.
The First-Tier Property Tribunal heard that Foxtons had charged the fee to the tenants after they signed up for a short-term rental at a flat on Wandsworth Road in South London (pictured).
The tenancy started on 15th September 2021 and tenants Michaela Kelly, Gilles Decock and Suzanne Fenelon were charged £600 a week for an eight-week tenancy from landlord Gloria Akaralo.
Foxtons wrote to the trio prior to moving in advising that they would have to pay a fee of £250 each.
The agency clearly assumed that the Tenant Fees Act did not apply to short-term leases, a worrying position given the agency has a significant short-lets operation in London.
The estate agency said the £750 was a ‘fixed fee’ to cover a variety of works depending on the individual circumstances of each tenancy.
This included conducting viewings, negotiating the tenancy, verifying references, and drawing up contracts and as specified in their contract.
But the Tribunal judge disagreed, pointing out that the “tenancy is an assured shorthold tenancy as defined by the Housing Act 1988 and amended by section 19A the Housing Act 1996 (i.e., no requirement for a minimum term)”.
“The tribunal finds that the ‘agency fee’ charged by the respondent is not a permitted payment under Schedule 1 of the Tenant Fees Act 2019 and therefore falls within the fees prohibited by section 2 of the 2019 Act.”
Foxtons has 28 days to appeal the judgement.
The purpose of an AST is to provide a tenant with a main or principal home – that’s a condition of the HA 1988’s definition of an AST. People who rent for 8 weeks aren’t likely to be without a principal or main home elsewhere. The Judgement link above doesn’t give any reasons for the decision so its not clear whether the Tribunal looked at the issue of main or principal home. If all 3 had homes elsewhere then the Judgement would be wrong and Foxtons were not charging a prohibited Fee – see CA decision in London Borough of Islington v Boyle & Anor