Foxtons Lose in Court

Foxtons has said that they will not appeal against the court ruling in favour of The Office of Fair Trading (OFT). The OFT is now intending to pursue letting agents that charge unfair commission payments to consumer landlords.

The High Court found that Foxtons’ renewal commission terms were not transparent to consumers, representing a trap and so were unfair.

The case revolved around Foxtons’ right to charge renewal fees if a tenant which they had originally introduced renewed a tenancy after the contract ended. This has often been described as a “money-for-nothing” clause. These terms can no longer be relied upon unless there are continuing instructions to manage the property.

The OFT expects other letting agents to comply with the judgement even though the law does not directly apply to other letting agents and has threatened enforcement action where similar “unfair” terms are used.

The High Court has not said that agents cannot charge renewal commission but in order to do so it will be necessary to establish that the liability to pay such commission is made absolutely clear.