Solicitors have claimed that Foxtons Estate Agency, based in London, could be hit with a legal bill amounting to £42 million. It comes as a result of a landlord launching action because of the extortionate price he had been billed to have a light fitting repaired.
In 2011, Dr Chris Townley employed Foxtons estate agency to let and manage a property he owned in London. The relationship was going smoothly, until Dr Townley was left skeptical after receiving a bill for £616 for a repair of a light fitting.
When Dr Townley contacted Foxtons to complain about the standard of work, he was told that the work had in fact been carried out by a subcontractor – Maintenance1st – who he subsequently got in touch with. He was distraught to find out that the subcontractor had actually charged much less than what Foxtons had billed him for.
Dr Townley challenged Foxtons, who admitted to adding £203 in extra charges to the £412.50 bill from the subcontractors. Solicitors acting for Dr Townley wrote and demanded compensation, claiming the charges were not covered in the landlord’s contract.
The solicitors go on to claim that if they are successful, thousands of other landlords who have experienced this could be entitled to pay-outs, resulting in Foxtons potentially having to pay more than £40 million.
The breakdown of the final bill received by Dr Townley shows a total of £550 plus an additional £66 for VAT, this is despite the subcontractor’s bill being only £412.50. According to Dr Townley, Foxtons had explained that they added £137.50, equal to 33% of the subcontractor’s bill, as commission.
As well as the extortionate commission fee, Foxtons decided to add a 10% “ad hoc management charge” plus VAT because the invoice totalled more than £500. However, Dr Townley stated that it only exceeded £500 because of the 33% commission fee.
Dr Townley explains:
“When I first heard there was a commission I was not happy, but thought it may be 2 or 3 per cent. When I found out the real amount I thought it was shocking.”
A spokesman for Foxtons has defended the fees:
“We are satisfied though that our fees are clearly laid out within our terms and conditions and that approvals are obtained from our landlords before works commence on their property.”
However, Dr Townley’s solicitors disagree and allege that the “hidden commission” was not covered.
It is believed that, since the original story made the news, hundreds of landlords and tenants have contacted Dr Townley with their concerns over how estate agents operate, leading to Dr Townley to call for the improvement of the letting industry as a whole.
BT www.propertysurveying.co.uk 16.06.15