Hidden residential property management fees lead to legal action against Foxtons over ‘hidden’ costs for landlords
Residential property management fees requires absolute transaprency on behalf of a managing agent. Leigh Day, a London based employment law firm, is now formally bringing a case against Foxtons for applying ‘hidden’ commission charges to landlords.
The main allegation against the managing agent is the non-disclosure of the 25-33% commission on works that Foxtons added to its residential property management fees. Chris Haan, a lawyer at Leigh Day, stated, “It seems that the contractors they use are all very expensive, sometimes 2 to 3 times the market rate. It appears that Foxtons has an interest in using more expensive contractors as that way they get a bigger commission.”
The whole case started when Chris Townley, a lecturer and King’s College London, questioned the £616 bill he received for a light-fitting repair at one of his properties managed by Foxtons. Investigations found that the contractors had only charged £412.50 with the rest made up with fees and an ‘ad hoc management charge’.
Leigh Day have taken this case on and are now collecting hundreds of landlords’ complaints against Foxtons ahead of a legal battle that could see compensation in the region of £42 million. With this potential scandal coming to light, landlords will be looking for alternative solutions avoiding these residential property management fees charged by agents over and above their comission.
Chris Townley, like other landlords of the 6,174 tenancies under Foxtons comprehensive property management service, chose this route due to time restraints and peace of mind that supposedly comes with outsourcing. His decision was made back in 2011 when mobile property management systems were still in their primitive stages and not a viable option.
Now there is a fundamentally more cost and time efficient solution – Arthur. This unique website and mobile property managment software allows landlords, tenants and contractors to communicate within one easy-to-use system. Managing yourself or finding an agent with the right transparent software means no more fees over and above your contractual managment fee.