Atkinson McLeod lost their claim for Renewal Fees at the Brentford County Court, not only did Atkinson McLeod lose but they were ordered to repay rent renewal commissions back to the Landlord represented by R James Hutcheon Solicitors
Atkinson McLeod v Gilpn [Rent Renewal Claim] - Brentford County Court 24.08.11
Letting Agent's Claim by Atkinson McLeod
At the Brentford County Court before District Judge Plaskow on the 24.08.11 the London Letting Agent Atkinson McLeod took our landlord client Mr Gilpin to Court because he refused to pay rent renewal fees and relied upon the test case of the Office of Fair Trading v Foxtons. In this case the Judge decided that Mr Gilpin had in fact terminated his instructions to Atkinson McLeod letting agent before the renewal commission could kick in in accordance with their standard term contract.
On construction of Atkinson McLeod's standard letting agreement contract the Judge considered that there was ambiguity or doubt in the contract and that any such issue of interpretation should be decided in favour of the consumer landlord. Therefore the Letting Agent Atkinson McLeod's claim for rent renewal fees (similar to Foxtons renewal fees) was struck out. In short, Atkinson McLeod lost their claim.
Landlord's Counter Claim
The Landlord instructed R James Hutcheon Solicitors, based in Merseyside, to represent him in connection with his London flat and required the return of rent renewal fees paid to Atkinson McLeod letting agents. The Landlord was aware of the R James Hutcheon success at court with other landlords claiming back rent renewal fees in line with the test case of the OFT v Foxtons.
Background of the Claim
The brief factual background here is that the Landlord retained Atkinson McLeod in July 2008 to find new tenants for his property. He also elected certain management services. Tenants were found, and the initial commission was paid. In June 2009 there was a renewal of the occupational tenancy. The Landlord asked Atkinson McLeod for a reduction in their fees because he had negotiated with his tenants who wished to have a reduced rent and deposit. That was refused.
There was then a demand for a commission fee of £3822 plus VAT being 14% of the yearly rent. The Landlord made payment of that albeit under some form of protest. Following that first renewal in 2009 whilst the tenants expressed dissatisfaction to the Landlord about Atkinson McLeod's service, they did stay on and there was a renewal. There was an invoice for renewal from 2010, by Atkinson McLeod.
In repect of the submissions made by the Landlord's Barrister instructed by R James Hutcheon Solicitors the Judge found that the landlord could not resist making payment for the renewal of the commisisons demanded by Atkinson McLeod and that the renewal commission fees were not binding upon him. The Landlord had some "heated" arguments with Atkinson McLeod but was led to believe that he had no choice but to pay the renewal fee commission.
The Judge in the Brenford County Court aftter reviewing the evidence made the following order:-
It’s clear as a matter of law that a person such as Mr G can recover payment.
He therefore succeeds, but not for the full amount.
The commission paid was 14%, but it’s clear from the agreement that only 9% represented the pure renewal commission and the balance was for the mgt fees. There isn’t any evidence of a total failure of consideration, notwithstanding the quality – or lack thereof – of the claimant’s mgt services.
Counsel has not been able to refer me to any hybrid case relating to this type of mgt fee. The Foxtons case related to a pure renewal fee.
In those circumstances there will be judgment for Mr G in the sum of £2446.08 which represented 9% of the renewal rent plus VAT.
C contended VAT was 15% in 2008-10.
Claimed 8% interest. J allowed 4%.
Total interest: £237.46
Court fee: £108.
I asked for unreasonable costs. Refused.
Payable within 14 days. By 7th September.
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