A property maintenance firm which two years ago stopped working for Foxtons when it said the agent wanted to increase its commission from 15% to 20%, says the practice of agents charging contractors is rife.
Will Davies, managing director of London-based Aspect, said two years ago that the practice was a “letting agent scam which should be exposed to the public”.
Yesterday he revealed that his firm now works for very few agents because so many charge contractors commission in return for putting work their way.
He told Eye: “This has got to the point where it is essentially accepted as the norm.
“If you want to do work for estate agents then you must accept there is a cost for doing so and that will be a commission payment that can range from 5% to 20%.
“This is not to say that every single agent acts this way and there are certainly some we work for who will not charge commission and instead drive the best pricing they can for their clients, Hamptons for example, but we work for very few estate agents as we do not believe this practice to be acceptable.”
Davies said that contractors would not usually be aware of landlords being charged mark-ups on repair bills by agents.
He said: “This is not something that the contractor is generally privy to, but there is general consensus that it happens.
“Again as a business we will not work with agents that mark up our bills to clients but we cannot be certain whether it is happening or not.
“I think this is not as commonplace as it once was as landlords are now aware of the practice and will ask for copy invoices so they can check they are not being marked up.
“Aspect is not working for Foxtons and in fact we only work for a very small number of estate agents as we will not entertain paying a commission or having our invoices marked up.
“Rather than allocate commission to the agent within our charge structure, for those agents who are against it we will instead drop our pricing so they can in turn pass this on to their clients.”
Aspect has now been in business for ten years. Over the last two years, its van numbers have gone from 150 to 300, and in the last year, turnover has gone from £12m to £16m.
The business, run by Davies and Nick Bizley, who met at 13 when they were in the same rugby team, has also just moved offices in south-west London, doubling its workspace.
Davies said: “Business is going very well at the moment and we are doing more and more business direct for landlords.
“We have our own property management division which is going from strength to strength as landlords see the benefit of having their properties managed by a genuine 24-hours business with in-depth knowledge of all maintenance and refurbishment requirements.
“We pass on reduced pricing direct and charge a fraction of what they would pay an estate agent to manage the property for them.”
A class action is being mounted against Foxtons by a law firm which claims that the agent is charging landlords “secret” fees on their repairs bills. Foxtons insists that all of its charges are clear.