Property Ombudsman warns on renewal commissions

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by Gill Montia

The Property Ombudsman is warning letting agents that renewals commissions included in their contracts must be clearly flagged up to landlords.

In his first interim report for 2010, Christopher Hamer refers to the recent High Court case involving Foxtons and brought by the Office of Fair Trading.

The case established that some of the terms in Foxton’s small print were unfair and the Ombudsman states: “With regard to renewal commissions where the agent is conducting that renewal, the effect of the judgment is that such a term is not necessarily unfair but that it must be actively flagged to the consumer.”

The report also shows a rise in enquiries during the first quarter of 2010 compared with the final three months of 2009: by 27.5% in the case of estate agents’ sales and 14.7% for lettings.

However, the Mr Hamer says he has been unable to identify a trend among new complaints being brought.

He concludes: “At this stage I can only monitor the situation and over the coming months I may be able to identify whether it is more than just a sudden peak.”