Oft Welcomes High Court Ruling On Foxtons Use of Unfair Terms

21 August, 2013

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Fantastic news for all landlords in the UK.  I’ve just found out that the High Court has ruled on a number of actions raised by the OFT (against Foxtons Limited) which argued that many of the terms and conditions used by Foxtons Limited were blatantly unfair.  The two main issues were:

a. charging renewal commissions on lettings after the initial AST period had expired, but not doing anything else for their fee, i.e. renegotiating a new rent fee with the tenant continuing in the property or managing the property and the tenant on a day to day basis (for this they charge alot more!)

b. charging landlords 2.5% fee for selling their property to their tenant, when they had NO hand in the eventual sales negotiation… it was purely a private transaction between the landlord and the tenant.

If you are a landlord and you are paying renewal commissions for tenancies that have gone “periodic” i.e. the initial AST has expired and you just let the property to the tenants on the same terms, conditions and rent amount, and the agent is NOT managing the property or tenant relationship, then you need to fight the agent and stop paying their fees for doing nothing. I did and my action has been vindicated by the High Court.  Below is an extract from a law firm’s comment on the case and the URL to see the full article is here:

OFT v Foxtons Limited [2009] EWHC 1681; a case comment

By Izaz Ali

A successful challenge was brought by the Office of Fair Trading under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) against the estate agents, Foxtons Ltd in relation to the latter’s terms and conditions of it’s lettings contracts.

The Unfair terms and the Court’s judgment

The High Court ruled that the term which meant that Foxtons could charge a repeat renewal commission which was inadequately communicated to the consumer and that these terms or terms which are similar should be highlighted in any and if possible all documents and leaflets which pertain to the said agreements. This conclusion was supported by the practical realty that a consumer (or one not legally trained) is unlikely to read the standard terms of an agreement and critically analyse each of those terms in relation to the relevant law under which such agreements are regulated.

Furthermore, and continuing with the theme of drafting contracts in plain and intelligible words the Court found that Foxtons failed to comply with this theme.

The ruling of the High Court confirms that not only must the terms and conditions of an agreement be drafted in clear and intelligible language but also terms which are likely to impact on a consumer financially should be communicated to that consumer before the contract is made. The effect of which would mean that any commission fees for example or charges will not come as a surprise to the consumer.

The OFT’s own website has been updated with their commentary, which can be found here.

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