London-based law firm Leigh Day is bringing a group claim against Foxtons on behalf of landlords claiming the estate agent is charging hidden commissions on repair and maintenance work.
It is claimed Foxtons is charging landlords hidden commissions of as much as a third of a contractor’s fee for repairs and maintenance.
Landlords are also accusing the agent of using contractors who charge as much as three times the market rate and for allegedly charging fees without telling landlords.
Leigh Day solicitor Chris Haan says: “We consider that Foxtons has a potential conflict of interest in that the more expensive the contractor is, the more Foxtons makes in hidden commissions.
“We believe these charges to landlords are unlawful as they are not sufficiently disclosed, so the landlords cannot give fully informed consent to them. This is against industry codes of practice.
“These kinds of practices may be widespread in the lettings industry and it needs to stop. We are taking this case on no win no fee with the aim of securing a refund from Foxtons for all affected landlords.”
Foxtons would not comment on the specifics of the case, but a spokeswoman says: “We are satisfied though that our fees are clearly laid out within our terms and conditions and that approvals are obtained from our landlords before works commence on their property.
“As part of our managed service to our landlords we arrange for maintenance works to be carried out on their behalf from a panel of carefully vetted and trusted contractors.
“Due to the volume of work we provide we are able to achieve discounted rates offering competitive value with the benefit of efficiency, availability and quality of work that many landlords would not be able to achieve on their own.”
One of the claimants, Dr Chris Townley, was charged £616 when a contractor installed an outside security light. He claims the contractor charged £412.50 for its service but added £203.50 as it was forced to pay Foxtons commission.
Townley claims Foxtons did not make it clear it would receive commission from contractors’ work.