Sales and lettings commission – material information

Key topic: Sales and lettings commission – material information

Award

£2000

Resolved by

Early resolution

What happened?

The complainant landlord says they:

• agreed to a 24-month tenancy with a six-month break clause
• an agreement was made where the agent’s fee would be six months’ rent (up to the first break clause)
• the terms of the tenancy were amended from a six-month break clause to 12-month break clause without it being made clear that fees would change
• the agent increased their commission and charged fees for 12 months’ rent
• the agent was unclear in their fee structure and poor with communication

The agent responded, saying:

• the fee structure was adjusted to meet the complainant’s requirements
• fees are charged up to the break clause as written in their contract

What evidence was provided?

Emails, contract

What was decided and why?

• The agent agreed that they should have been clearer and more transparent about their fee structure
• When the amendment was made, the increase in their commission was not brought to the complainant’s attention
• They only relied on the terms of their contract which was unreasonable
• The complainant had made it clear, in writing, that he would not have requested the amendment if he knew the fees would increase
• The agent fell short of their duty to provide all material information which meant that they were unable to make an informed transactional decision
• The agent was entitled to charge a reasonable fee but must make sure their fees are clear and transparent, and should not simply rely on the information written in their contract

How can you avoid this happening in future?

• Agents must be clear and transparent in their communication, especially about fees
• Consumers must be provided with all material information before they proceed, allowing them to make a fully informed transactional decision
• It is not sufficient to simply rely on the contract terms and communication is key