Online Archive  
Issue 1 - December 1971

Estate agents and accommodation bureaux throughout England continue to defraud customers by charging them commissions for finding a flat.

A Typical case is that of Newcastle University postgraduate Mike Cousins who went to the Town and Coast Agency of Newcastle in August to find out about vacant flats. Mike and his wife Pam viewed a flat in Larkspur Terrace, Jesmond, that was listed on the agency books and took it.

Mike handed over to the Town and Coast Agency's secretary the agreed calendar month's rent of 23.83p and "our fee" of 8.25.5p. He received two receipts; one for the flat rental and one for "our" fee, which works out at one and a half week's rent. This little transaction was seen by four witnesses.

There is, in fact, nothing unusual in all this. Indeed, thousands of people, particularly students and immigrants have been hoodwinked since the Accomodation Agencies Act of 1953.

Section B of this Act reads: It is illegal to demand or accept 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.

The agency can legally only charge the landlord but not the person seeking accommodation.

This law has, however, seldom been utilised by exploited tenants but on June 29 this year Mr Vishin Harridas, himself a member of the Bar, took his case to the Court of Appeal and won it. Earlier a County Court Judge awarded 95 commission payment to a London estate agent against Mr Harridas who had taken a five year lease on a Baker Street flat at an inclusive rent of 905 per annum. The agents, who had found him the flat, wanted 10% commission of the first year's rent.

Town and Coast Agency may find that the Court of Appeal hearing of some interest in them.

Lord Justice Davis said: "It was an agreement in breach of the 1953 Act. Unless the defendant got a flat and was satisfied with it, in the event there would be no payment."

He went on to say that it was perfectly clear that plaintiffs (the estate agents) were demanding money in consideration of supplying particulars of a flat.

His colleague, Lord Justice Edmund Davies, said that the Accomodation Agencies Act is not as well known as it should be.

He added: "The sooner the legal position is made known, to the public, and to those who hold themselves out as estate agents, the better for the sake of the community."

Their Lordships were unanimous in quashing the County Court decision and were also unanimous in refusing the estate agents leave to appeal.

Normally, money paid under an illegal contract is not recoverable but, if paid in all innocence, it is not necessarily lost.

Clearly, nave customers seeking rented accommodation have not speculated that estate agents might break the law in this matter.

A judge would tend to order repayment of the commission on the ground that the Act is aimed at protecting a particular class of people, i.e. the tenant.

Unfortunately, the cost of litigation might easily outweigh the commission that the tenant wants back. This is one reason why accommodation agencies and the like can break this law quite intentionally with little fear of being caught.

It is high time this squalid business came to a full-stop.

The kind of people who are so desperate for accommodation that they will pay a fee in addition to rent are usually people without money anyway. In some cases the effect of this fee can be crippling.

Might not student unions, welfare agencies or even conscientious solicitors initiate a few test cases to clear the air once and for all?

Ref: All England Law Reports: August 24th 1971.