A landmark court ruling over a £36 fee charged by a letting agent has closed a loophole for letting agents to levy extra charges on tenants in Northern Ireland, it is claimed. The ruling could mean that hundreds of thousands of pounds worth of fees will have to be refunded by agents to tenants. The case law challenge was brought by a student tenant, Paul Loughran, and has been upheld under existing legislation. Supporters of Loughran insist a ruling in Belfast County Court means letting agents should no longer be able to charge unfair fees.
In Northern Ireland, fees are not – yet – banned by statute. However, there was a consultation last year into the proposal.
In Belfast County Court, District Judge Philip Gilpin instructed letting agent F5 Property Ltd to repay Loughran the £36 admin fee charged to him before the start of his tenancy. He held that if the letting agent had not been involved the service paid for would have been carried out by the landlord and therefore the fee had been paid for nothing. On that basis the fee was void under the terms of the Commission on Disposals of Land (Northern Ireland) Order 1986. But the judge declined to order that any fees collected by letting agents on behalf of landlords should be recoverable by tenants.
"These fees were unfair, and the judge had previously commented in December that I was 'in effect contributing towards the costs of services the letting agent had been commissioned to do and such payment is void under the provisions of the order',” said Loughran. "Some students are being charged anywhere from £20-£500 per tenant, per property, when they already face costs of several hundred pounds for first month's rent and tenancy deposits."
Loughran also won a similar case in December 2017, when Judge Gilpin ordered letting agent Piney Rentals to repay a £30 administration fee. Letting agent fees are banned in Scotland and the Irish Republic, while legislation to scrap the fees is before Parliament in both England and the National Assembly in Wales.
Ray Cashell, chairman of housing charity Shelter NI, who backed Loughran's case, said: "This finally closes any supposed loopholes and tenants will now know they should not pay these fees."