The Office of Fair Trading has issued High Court proceedings against Foxtons over the use of certain terms in Foxtons’ lettings agreements with landlords.
It is seeking a declaration on the application of the Unfair Terms in Consumer Contract Regulations 1999 and is seeking an injunction against Foxtons preventing it from using the terms.
OFT says it is taking this action in response to consumer complaints.
If successful in this case the OFT intends to enforce compliance with the law throughout the letting industry wherever similar terms are being used.
The terms to which the OFT objects in Foxtons’ letting agreements can potentially require landlords to pay Foxtons substantial sums in commission, where a tenant continues to occupy the landlord’s property after the initial fixed period of the tenancy has expired – even if Foxtons plays no part in persuading the tenant to stay, and no longer collects the rent or manages the property.
Foxtons’ terms can also require the landlord to pay these sums after the landlord has sold the property. The terms also demand commission where the landlord sells the property to the tenant, even where Foxtons has played no part in negotiating that sale.
Foxtons contends that its agreements with landlords are not unfair and continues to use these terms.