Landlord News

Hamptons Estate Agents Breach Fees Code of Conduct

Em Morley - April 24, 2015

Estate agent Hamptons has been identified by the Advertising Standards Authority (ASA) as breaching the code of conduct on displaying fees in advertisements.

The ASA received a complaint regarding an online advert which stated: “£1,200 per calendar month + £216 incl. VAT admin fee per property + other fees may apply.”1

A hyperlink appeared in the text “+ £216 incl. VAT admin fee per property + other fees may apply” to additional details about the fees.

The complainant knew that there would be additional fees, but did not believe the information was clear.

Hamptons argued that the administration fee was the only fixed cost. It said that the hyperlinked text connected to a PDF entitled Charges and Information for Tenants.

Hamptons Estate Agents Breach Fees Code of Conduct

Hamptons Estate Agents Breach Fees Code of Conduct

This document detailed other mandatory charges that could apply, including the cost of references for tenants.

The document also said: “Other charges may be incurred as part of the application process”1, which allegedly referred to check-in fees. These fees vary from property to property depending on the charge imposed by the independent inventory clerk.

The Bristol branch of the firm uses a different fee system. They apply an all-inclusive fee, of the administration fee, referencing fee and check-in fee, which is either 35% of the first months’ rent or £420. Hamptons said it would amend the document with sufficient details of fees.

The ASA upheld the complaint, saying that Hamptons had breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.17, 3.18 and 3.19 (Prices). The ASA also said that Hamptons couldn’t use this advert again.

The ASA said: “The ASA considered consumers would interpret the claim ‘+ £216 incl. VAT admin fee per property + other fees may apply’ to mean that the administration fee was the only non-optional charge and there might be other fees depending on the situation.

“However, we understood that there were other non-optional fees that consumers would have to pay if they rented the property. These fees were a referencing charge and a check-in charge, which would be combined with the administrative charge into an all-inclusive fee for their Bristol branch.

“For other branches, the referencing charge was one of two fixed prices depending on whether the consumer was a tenant or a business, and the check-in charge varied depending on the size of the property.

“We noted CAP Code rule 3.19 stated: ‘If a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer’s circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated.’

“While we acknowledged details of the costs were included in a document which was hyperlinked to the claim, we considered non-optional fees were material information that was likely to have an impact on a consumer’s transactional decision. We considered, therefore, that the information about the non-optional fees was not sufficiently prominent. Because the ad misleadingly implied other fees might not apply, and the information about non-optional fees was not sufficiently prominent, we concluded the ad was misleading.”1

1 http://www.landlordtoday.co.uk/news_features/Hamptons-in-hot-water-over-fees