Following the ruling today in this matter, letting agent terms of business may well contain some significant flaws and unenforceable terms. In particular any term which seeks to charge a commission fee where the landlord sells the property to the tenant will be deemed unfair. In addition, where an agent seeks to charge commission on a renewal where the landlord has sold the property to another landlord such clauses will be deemed unfair.
What is not unfair is the charging of a renewal fee, even where the agent has not been involved in the negotiation of the renewal, provided that this charge is signposted to the landlord at the outset of the instruction and drawn to their attention. The reporting of this matter is inaccurate in this aspect.
Nothing in today’s judgement requires agents to refund monies to landlords but it will prevent agents from using or relying on clauses that have been found to be unfair.
PainSmith have already amended our standard terms of business and are able to provide these for immediate use as a stop-gap measure until such time as agents can amend their standard terms.