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Case Study: Did estate agent earn their “performance fee?”

25th June 2018

In one of the first cases to cite the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), The Property Ombudsman (TPO) has upheld a complaint made against an agent who had charged a performance fee on top of their standard fees.

A vendor chose to market their property with an agent who offered a pay monthly service with “no hidden charges, no commission, no minimum term.” The property received an offer for over 10% more than the asking price, triggering a “performance fee” in favour of the agent, a fee that the vendor claimed they had not been made aware of.

Despite the fact that the fee appeared in the terms of business, it was not “clearly and unambiguously” displayed. It did not, for example, feature in “fees and charges”, instead featuring in the penultimate section of the document. Nor did the fee appear anywhere on website where the misleading statement “no hidden charges, no commission, no minimum term” featured prominently.

In the view of The Property Ombudsman this was a clear breach of TPO’s Codes of Practice in failing to comply with the CPRs. TPO went on to highlight the emphasis CPRs place on agents when it comes to

  • hidden or unexpected fees which are considered a misleading omission under CPRs, and
  • the average consumer who would not necessarily be expected to read in detail the full contents of the terms and conditions.

The second point is important in a business to consumer context. Although a “common sense” outcome simply putting something in our terms and conditions without drawing attention to its importance will not be tolerated.

Agents should be mindful to ensure that all potential costs incurred are known to the client. This includes both sales and lettings, which has been the focus of recent scrutiny when it comes to tenant fees and charges.


Make sure you are asking the right questions of your clients, and documenting their response. Compliance Packs from Landmark are a simple pay-as-you-go compliance tool to help agents fulfil their obligations under CPRs and AML.

Compliance in a Box includes an electronic property information questionnaire alongside client verification checks and retains a time and date stamped audit trail of all compliance activity.

For more information please complete the form below, or contact Compliance in a Box on 01524 220013

Register your interest today



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