Is the following a potential ruse to circumvent the No Fees legislation

[loanarranger]

I met someone whilst on holiday who was intending to come and study in London , he coming from the Slovak country with fair to middling English.

We discussed accommodation whilst he was staying in London and he said he would be doing the rounds of agents as he was to be joined at the end of September by a couple of friends. I cautioned him to beware of being taken for a ride given his innocence of what can happen with agents.

Today he wrote asking if the attached Terms of Business were correct? The Agreement is from a "Consultancy organisation" but was according to its web site linked to a Letting Agency which also had links to other agents!!! The agreement covered the investigation of suitable accommodation , either on a house or room to let basis throughout London and included the negotiation of the rental and acceptance. All of which would require a non returnable fee of £1150. Clearly I have cautioned him against rushing into such a formal arrangement and it set me wondering if other Forum members had come across any similar situations ostensibly designed to circumvent the NO Fees legislation by Tenants.

[jpkeates]

The "consultancy organisation" would seem to be proposing to do "things" in "the course of a business" in "response to instructions received from...a tenant who is seeking to find housing to rent."

Which makes them a letting agent and, therefore, subject to the Tenants Fees Act.
So I think it's a prohibited payment.

Your friend should report the organisation to Trading Standards (and certainly not agree to it).

If you send me a Personal Message with the name of the organisation, I'll have a bit of dig around.

[loanarranger]

Thanks JP will do PM

[jpkeates]

I've been told it probably breaks the Accommodation Agencies Act 1953.

[leaseholder64]

Looking at section 1 of the Act, I don't think there is much doubt. I was pretty sure this was illegal by old legislation yesterday, but all my Google searches were being swamped by results about the Tenant Fees Act.

[loanarranger]

By way of an update, the person who contacted me was guided by some excellent advice preferred by JPKeates who PM’d me and distanced himself from progressing the matter, unfortunately he now appears to have got “caught” by another such operation where one of the business owners has recently been penalised by the authorities for failing to return deposit monies in another Lettings operation located in London. The terms of the agreement are almost identical to those of the original operation and given that they are requiring the deposit monies and one months rent before “concluding negotiations” with the rental agency strikes me with fear that this is an unlawful operation. I have again advised him to NOT to do this and to make direct contact with the actual agents. So it does seem that such practices are common in certain parts of London.