Unlawful agency charge?

neverdespairgirl

I was looking at https://www.spareroom.co.uk

they have a policy called "early bird", which means you have to pay to see ads which are less than a week old.

I think this is illegal - what do others think?

Accommodation Agencies Act 1953

Illegal commissions and advertisements.

1. — (1) Subject to the provisions of this section, any person who, . . . F1 — (a)
demands or accepts payment of any sum of money in consideration of registering, or undertaking to register, the name or requirements of any person seeking the tenancy of a house;

(b)
demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let; or

(c)
issues any advertisement, list or other document describing any house as being to let without the authority of the owner of the house or his agent,


shall be guilty of an offence.
(2) A person shall not be guilty of an offence under this section by reason of his demanding or accepting payment from the owner of a house of any remuneration payable to him as agent for the said owner.
(3) A person being a solicitor shall not be guilty of an offence under this section by reason of his demanding or accepting payment of any remuneration in respect of business done by him as such.
(4) A person shall not be guilty of an offence under this section by reason of his demanding or accepting any payment in consideration of the display in a shop, or of the publication in a newspaper, of any advertisement or notice, or by reason of the display or publication as aforesaid of an advertisement or notice received for the purpose in the ordinary course of business.
(5) Any person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding [F2 level 3 on the standard scale] or to imprisonment for a term not exceeding three months, or to both such fine and imprisonment.
(6) In this section the following expressions have the meanings hereby assigned to them that is to say:— “house” includes any part of a building which is occupied or intended to be occupied as a dwelling;

“newspaper” includes any periodical or magazine;

“owner”, in relation to a house, means the person having power to grant a lease of the house.

G_M

I'm no expert but I wonder if lodgings (which I presume these are) fall within the category of " the tenancy of a house" and "particulars of houses to let"?

They may have a get-out there.

Otherwise - illegal.

edit: just re-read and seen: ' “house” includes any part of a building which is occupied or intended to be occupied as a dwelling; '

Jowo_2

No, it's not illegal. That law is relatively toothless, much to the despair of Trading Standards in London who would like to tackle the 'accommodation finding' agencies who charge tenants around £70 to register with them before they will give them listings or undertake viewings. These agents don't actually manage the properties, they merely introduce tenants to landlords. Tenants were typically complaining that the properties they saw online were never available to view after they parted with their admin fees - in other words, that the adverts were fake, and that the accommodation they were then offered to view were nothing like the ones previously advertised that persuaded them to part with money to proceed with them.

Trading Standards told me that someone had tried a legal challenge many years ago against the companies offering accommodation finding services in London but the judge accepted their defence that the fees were for making the appointments, hence a precedent has been set which makes it very hard to make that legislation stick.

tbs624

Jowo wrote: »

Trading Standards told me that someone had tried a legal challenge many years ago against the companies offering accommodation finding services in London but the judge accepted their defence that the fees were for making the appointments, hence a precedent has been set which makes it very hard to make that legislation stick.

Do you have a link to this precedent?

neverdespairgirl

Jowo wrote: »

Trading Standards told me that someone had tried a legal challenge many years ago against the companies offering accommodation finding services in London but the judge accepted their defence that the fees were for making the appointments, hence a precedent has been set which makes it very hard to make that legislation stick.

Here, though, there's no reference to appointments?

tbs624

Jowo wrote: »

No, it's not illegal. That law is relatively toothless

The law being "relatively toothless" is not the same thing as the behaviour in question being "not illegal"

Jowo_2

tbs624 wrote: »

Do you have a link to this precedent?

No, it was something a Trading Standards officer in London informed me about when I queried why it seemed there was little action being taken against the accommodation finding agencies in London where they received a high number of complaints from tenants.

Quite commonly, they would advertise on places like the Gumtree or Trovit, low cost high quality studio flats in central London with bills included. Then once the tenants had paid their money to view them, they were typically shown shabby more expensive flats outside central London and told that the flats they were interested in viewing had just that moment been let out...

As far as the Trading Standards people were concerned, that law is not enforceable.

From their perspective, these agencies with their largely fake ads to tempt their tenants in had terms and conditions which made it clear that they were an appointment making service, therefore as long as they abided by the Ts &Cs of the contract, there was little they could do, however disappointed the tenants were, other than tell the tenants to take them to the small claims court to recover the fee.

Jowo_2

tbs624 wrote: »

The law being "relatively toothless" is not the same thing as the behaviour in question being "not illegal"

It may as well be.

If its toothless legislation, the breach of civil or criminal law relating to that specific clause is irrelevant because its not enforceable, similar to how the poor wording of the TDS legislation means that many landlords can protect the deposit just before the tenant's court case and wriggle out of the x3 deposit penalty.

The Trading standards officers made clear to me that they felt they were not able to successfully prosecute accommodation finding agencies and were hoping for a change in legislation that could cover unfair trading practices.

Jowo_2

I've dug out the communications which date from 2007 from the two Trading Standards officers in different London boroughs and here are there thoughts on why that legislation is worthless/pointless/unenforceable as it applies to accommodation finding agencies and why it is possible that accommodation listing websites can charge fees to match tenants with landlords without falling foul of it if their Ts and Cs are clear enough about the service provided.

Trading Standards Officer 1
"Letting Agents are particularly under-regulated in the UK. In fact the only applicable piece of legislation at present is the Accommodation Agencies Act and that was drafted in 1953! ...This creates a couple of offences, both of which are very tightly drafted and
therefore very limited in their scope.

The first ... makes it an offence to demand or accept payment of any sum of money in consideration of registering,
or undertaking to register, the name or requirements of any person seeking the tenancy of a house. This means that an agency cannot take money off me for simply registering my details, but what happens if the agency undertakes to do more than that, and also arranges appointments for me with prospective landlords?

I was involved in a case a number of years ago which tested that scenario. The agency argued in Court that the fee they charged was for
arranging appointments and therefore fell outside the remit of the Accommodation Agencies Act. Unfortunately, the Magistrates agreed and passed a not guilty verdict. The Authority that I was with at the time sought a legal opinion on this ruling and was advised that given the wording in the Act (which is very specific), it was inevitable that the same judgement would be passed in any future cases - in other words we had no chance of winning in cases where the facts were similar.

Having spoken to people who have previously complained about the service that xxxxx company provide, it seems clear that whatever else they do, they do actually make appointments for prospective tenants to view properties. This being the case it is unlikely that we could make out an offence under section 1 of the Accommodation Agencies Act.

Unfortunately the 1953 Act was drafted in response to very specific practices that were prevalent at the time and doesn't allow for any
element of "future proofing", i.e. it didn't take into account any possible future practices that may be just as objectionable. This has
meant therefore that our hands are pretty much tied and all that we have been able to do in the past is to point people in the direction of
Estate Agents who only levy a charge when they have found a suitable property.

This situation however may change at the end of this year when the Unfair Commercial Practices Directive is implemented into UK law. This
will create a duty on traders not to trade unfairly and will contain a number of offences that are drafted very widely indeed. It is likely
that this will give us greater scope to deal with agencies that seek to exploit people who, for whatever reason, are unable to make use of the main, high street estate agents.

With regard to ... specific question about redress, at present the only route open to tenants is via civil (as opposed to criminal) law. If
they can argue that the service provided was essentially not up to standard, then they may be able to establish that there has been a breach of contract. This may arise for example if all of the appointments arranged are to view properties that fall a long way below the standard that a tenant has made clear they are interested in. The tenant would, in the first instance need to write to the agency explaining why they believe there to have been a breach of contract and setting out exactly what they want the agency to do - i.e. refund the fee paid. If the agency refuses then the next step would be to consider issuing a claim through the County Court (Small Claims Court).

..In general, Trading Standards departments enforce criminal legislation, but there may be a civil law route open to us via the Enterprise Act. Under certain circumstances, we can apply for injunctive action if a trader is carrying out practices that are detrimental to consumers (as a whole). It may be that sufficient evidence of repeated breaches ofcontract similar to the above would give us grounds to explore that route. It should be noted however that this would not be the same as taking action on behalf of the tenants who would still need to pursue their own separate claims."

Trading Standards Officer 2
"...As the Accommodation Agencies Act 1953 does not provide enough scope to cover “mal practices”, I am afraid we may have to wait for a better and more detailed piece of legislation to replace the Accommodation Agencies Act 1953.

Otherwise, for the meantime, I agree the Unfair Commercial Practice Directive (to be implemented in the near future) may bring a new range of measures to tackle unfair business practise. It may be possible to use this in conjunction with the Enterprise Act to improve consumer protection by giving enforcers strengthened powers to obtain court orders against businesses that fail to comply with their legal obligations to consumers. "

DVardysShadow

neverdespairgirl wrote: »

I was looking at www.spareroom.co.uk

they have a policy called "early bird", which means you have to pay to see ads which are less than a week old.

I think this is illegal - what do others think?

Accommodation Agencies Act 1953

(4) A person shall not be guilty of an offence under this section by reason of his demanding or accepting any payment in consideration of the display in a shop, or of the publication in a newspaper, of any advertisement or notice, or by reason of the display or publication as aforesaid of an advertisement or notice received for the purpose in the ordinary course of business.

I think you would be right as long as you can make out that the particular website is not a newspaper or a shop.

But reading behind it all, I think that the important distinction [in intent, rather than as drafted], is whether spareroom are

• just neutral advertisers who get their money for display of the advert regardless of outcome
• agents or brokers who obtain money for being the provider of the tenant

To me, it looks like the Act was intended to thwart agents who demand kickbacks for acting as gateway to property to the detriment of landlords and aspiring tenants alike.

neverdespairgirl

Jowo wrote: »

In fact the only applicable piece of legislation at present is the Accommodation Agencies Act and that was drafted in 1953!

Thanks for posting that, very interesting.

I think the T Standards bloke who wrote that needs to realise that 1953 isn't old in legislation terms - ABH, GBH, assault, etc, are all prosecuted under the Offences Against the Person Act 1861!