» Foxtons lose court battle with landlords

OFT welcomes landmark ruling

Article Published: 17th July 2009

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Foxtons were accused of unfair terms and conditions in their contracts with its lettings agreements with landlords.

The Office of Fair Trading (OFT) welcomed a ruling at the High Court which it said was proof that the contract prepared by Foxtons was against the rules under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR). The next step will be for the OFT to ask the High Court to go on to grant injunctions preventing Foxtons from continuing to use the same agreements.

The problem centres on the following terms:

The requirement by Foxtons for landlords to continue to pay the agents a substantial amount of commission when a tenant decides to remain in the rental property after the initial fixed period of the tenancy agreement whether Foxtons had any part in getting the tenant to stay on or not and offers no other managerial services such as collecting rent or managing the property.

The current contract requires the landlord to pay commission even after it has sold the property and includes the payment of full estate agents’ commission for the sale of the property to a tenant.

The Chief Executive of the OFT, John Fingleton, said that the ruling “sends out a clear and unambiguous message that businesses offering services need to ensure unexpected or surprising terms are not hidden away in small print.”

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