Only 70% of Estate Agents are Crooks – The Illegal Charging of Estate Agency Fees through the lens of Glocalisation

By Alex Belloir

 

The face of glocalisation is McDonalds. If you type in the word on Google and search images, you will be met by the unmistakable golden arches dominating your screen. Fortunately, glocalisation does not reduce itself exclusively to ‘the art’ of combining local flavours and delicacies with a trademarked aftertaste. Originally imported from Japan, it became a buzzword used by social scientists as of the 1990’s (Khondker, 2004), with some of the discipline’s largest names addressing it. Iconic figures such as Bauman (1998) conceptualized it in the context of our ever evolving societies as a face of hyper-globalization, where local cultural tokens shine in phenomena that is omnipresent. Crime therefore seems to be but one of many phenomena that can perhaps be better understood when looked through the lens of glocalisation.

As widely stated by a number of sociologists and criminologists (Berger & Luckmann, 1967; Rafter, 1990; Henry, 2009; Koenraadt, 2010), crime is a social construct that is bound by social context (Mills, 1959), by cultural norms and values (Garland, 2001; Ferrell, Hayward & Young, 2008), as by time and space (Conrad & Schneider, 1992). Crime therefore adopts, or adapts to, local and cultural trends, norms, and surroundings. This appropriation of “cultural tokens” is multifaceted. In some countries, an act can be labelled a crime whilst in neighbouring States it is not. In some social settings, acts can be perceived to be deviant, although they are not outlawed. Alternatively, crimes can stem from local circumstances, where (a) specific situation(s) is exploited. These local facets therefore find themselves deeply enrooted in culture: the doctrine of cultural criminology (Ferrell, 2014) which revolves around the Weberian concept of verstehen. To however employ the term glocal, a foot must be on the global stage alongside the presence of a local cultural twist. One of the rare pieces of criminological work to expand directly on the term glocal was written by Hobbs (1998), who explained that transnational organized crime is perhaps better understood when looking at its locally implanted roots. Though a lively debate could be had over the definition of ‘glocalised crime’, we here simply use the term glocalisation to assist in highlighting the phenomenon of crimes that can be found the world over, that yet define themselves individually by adopting, or by adapting to, local trends. These crimes are not necessarily interconnected, as Passas’s (1999) definition of transnational crime would then be more suited. Crimes committed by estate agencies thus appear to be a fitting example, as they can be found in countries all over the world, yet differ from one another by adapting to the specific local context (culture, laws, situation and circumstances) in which they are situated. We shall therefore use estate agency crime to illustrate crimes that can be seen via the lens of glocalisation.

What exactly are crimes committed by estate agencies? Although there are a number of crimes estate agencies can commit – ranging from illegally renting out properties to tax evasion (Ferwerda, Staring, de Vries Robbé & van de Bunt, 20017) – we here focus on the rental market and the illegal act of charging the accommodation-seeker-turned-new-tenant a fee. This practice of illegally charging the new renter fees can be found across the globe. In Scotland, despite it being outlawed since 1984, estate agencies (‘letting agencies’) still regularly charge new tenants approximately £70 to £90 for their services (EPTAG, 2018). New Zealand banned ‘letting fees’ in December of 2018, as new tenants regularly paid one week’s rent on top of the deposit and first month’s rent (Cheng, 2018). In Germany, rather than the tenant, agency fees for rental properties are at “the burden of the person letting out the flat” (Expatica, 2019). This is also the case here in the Netherlands, yet research I conducted at the end of 2018 showed that estate agencies illegally charged fees to the tenant in over 70% of cases (Belloir, 2019). Charging the tenant rather than the property owner fees is therefore illegal in a number of countries, however, the means of charging these fees or evading the law is dependent on the local situation in the country.

To not dwell too much upon the legal stuff, (very) simply put, estate agencies in the Netherlands may only charge the rental accommodation-seeker-turned-new-tenant a fee in very specific circumstances. In the vast majority of cases, the fees charged are illegal. The question remains as to why this illegal charging of fees is so prominent? First of all, it is a combination of demographics and culture. The Netherlands is small and densely populated (Niemietz, 2012). This equates to scarcity on the housing market, meaning that finding rental accommodation is difficult (RTL Nieuws, 2018). Rental accommodation seekers therefore find themselves in a precarious situation as they are many, yet available accommodation is few. Estate agencies seem to have exploited this situation by charging illegal fees, as they know that seekers are in need and are consequently more likely to pay. Founded within Sykes and Matza’s (1957) notion of ‘neutralization’, over time, estate agencies appear to have rationalized this illegal charging of fees as being legitimate. With Sutherland’s differential association theory (1947), it seems that this practice became more and more widespread, to the extent of it becoming considered to be “standard practice” (Risseeuw, 2013).

We can hence discuss the notion of a ‘cultural norm’, where the charging of illegal fees appears to be an inherent part of ‘estate agency culture’ which is demonstrated by the practice’s prevalence on a national scale. This crime therefore came about by adapting to the local trend of a scarce rental market, and individuals’ ‘willingness’ to pay a fee to guarantee accommodation. A vicious circle seems to have set in and proliferated, as the exploiting of the local situation has led to a practice which turned to a norm, hence it becoming culturally embedded, in turn reinforcing this practice as ‘normal’. This is but a first example of the role of locality in crime. Locality (and hence culture) does not solely play a role in forming or shaping crime. My research unveiled three innovative tactics employed by estate agencies that demonstrate how crime evasion is also dependent on location. These tactics all show how estate agencies use local situation(s), circumstances and laws to charge fees in a manner that evades or limits potential legal sanctions.

First, estate agencies attempt to disguise fees by presenting them to accommodation seekers as purchasable extras. In some agencies for example, anyone can apply for one of the accommodations, however, a points system exists. In the case that multiple individuals apply for the same property, the applicant with the most points will be the one that is put forward to the landlord. No direct fee is therefore imposed, however, it became evident that purchasing points (approximately €149 for the maximum amount) is necessary to even stand a chance of getting the accommodation. This tactic – which remains illegal – therefore adapts to the local situation by rebranding the word ‘fee’ as an ‘extra package’ in an attempt to present it as legitimate. This in turn disguises the fee and lowers the chance of an accommodation seeker realising it is illegal. By normalising the situation – entre Sykes & Matza and Sutherland – accommodation seekers fail to seek legal action.

Secondly, some agencies manipulate the situation into one where it would seem that the fees they are charging are legal. As previously mentioned, there are specific circumstances where an estate agency can charge a fee: notably only if the accommodation seeker reaches out to the agency with specific criteria, and if the property the agency finds is not already in their repertoire. Agencies fool accommodation seekers into a situation where it appears that the property was one they asked them to find, thus making the fees they request seem legal. Estate agencies know in which circumstances charging fees is and is not permitted, and here manipulate the local circumstances in an attempt to mask the crime.

Finally, in 2015, the Dutch supreme court reiterated that charging fees is illegal. Prior to 2015, research shows that it used to be common for estate agencies to charge fees of one month’s rent plus 21% VAT (Risseeuuw, 2013). Many estate agencies (almost 95%) seem to have responded to the supreme court’s statement by lowering their fees to less than €500 (usually €400) as this is the minimum amount required for a claimant to be eligible for subsidised legal assistance. Without the subsidies it would cost the claimant more in legal fees than the sum they are trying to reclaim. As a result, we here see that estate agencies have adapted to the local laws and regulations by placing the accommodation seeker in a situation that makes reclaiming the fees economically unviable.

The dynamics surrounding locality (culture, situation, circumstances and context) are therefore variables that highly influence how crime shapes itself, be it in how it violates, or evades the law. When looking at the practice of illegal agency fees, some municipalities are trying to tackle the issue with policies in which estate agencies now face losing their business rather than just having to refund the fees. Although this sounds promising as there is now a strong deterrent in place, evidence shows that this may not be sufficient as some agencies have already found a way of circumventing this provision (Groeneveld, 2019). As stated, crime is flexible and adapts to local circumstances. Laws are in essence universal as defined by Kantian ethics, to which local dynamics such as culture, are often overlooked. To tackle crime, perhaps it would then be beneficial to establish legislation that has a strong deterrent effect, whilst simultaneously addressing toxic local culture(s).

References

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Belloir, A. (2019). Navigating the Rules: Legal Provisions and Dutch Estate Agencies’ Tactics to Circumvent the Law. In M. Vols & C. Schmid (Eds.), Houses, Homes and the Law (Studies in Housing Law; Vol. 3). The Hague: Eleven International Publishing.

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Cheng, D. (2018, November 1). Bill passes meaning letting fees will be gone by Christmas. The New Zealand Herald. Retrieved from https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12152707

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Henry, S. (2009). Social Construction of Crime. In J. Miller (Ed.), 21st Century Criminology: A Reference Handbook (pp. 296-305). Thousand Oaks, CA: SAGE Publications.

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Niemietz, K. (2012). Abundance of land, shortage of housing. The Institute of Economic Affairs (IEA), 38. Retrieved from http://iea.org.uk/sites/default/files/publications/files/Abundance%20of%20Land%20Shortage%20of%20Housing.pdf

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Risseeuw, P. (2013). Te huur: ruimte voor verbetering. De markt voor bemiddeling bij verhuur en huur van woonruimten in Nederland. Periscope Onderzoek & Advies. Retrieved from www.periscoop-consult.nl/wp-content/uploads/2013/10/Periscoop-.-VBO-Makelaar-Te-Huur-Ruimte-voor-Verbetering.pdf

RTL Nieuws. (2018, March 26). Muurvast op de woningmarkt: ‘Straks heb ik helemaal niks’. RTL Nieuws. Retrieved from www.rtlnieuws.nl/geld-en-werk/artikel/4127301/muurvast-op-de-woningmarkt-straks-heb-ik-helemaal-niks

Sutherland, E. (1947). Principles of Criminology. Philadelphia, PA: J.B. Lippincott.

Sykes, G. & Matza, D. (1957). Techniques of Neutralization: A Theory of Delinquency. American Sociological Review, 22(6), 664-670.

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Alexandre Belloir obtained a Bachelor’s in Sociology in France before moving to the Netherlands in 2014 to pursue the Master’s programme in Global Criminology at Utrecht University. Since 2018 he has been working as a Junior Researcher for the University of Groningen on themes such as real estate crime and the politicisation of the civil service.

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