OFT make progress for landlords in Foxtons case

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by Gill Montia

The Office of Fair Trading (OFT) has this week welcomed a Court of Appeal Judgment which the watchdog says confirms its view in relation to a High Court case against estate agents, Foxtons, due to be heard at the end of this month.

In February of last year, the OFT began an action against the London-based estate and lettings agency, which had been accused of trapping landlords in unfair contracts.

The firm charges landlords for finding tenants and charges a further fee if a tenant remains in a property beyond the initial term of the let.

The charge is made regardless of whether Foxtons played a part in retaining the tenant and even when the firm is no longer the managing agent.

In addition, should a client sell a property halfway through a contract period, Foxtons still expects to receive commission for the full period.

The OFT issued the proceedings under the Unfair Terms in Consumer Contract Regulations 1999 and during the preliminary stages of the case it appealed against a ruling by Mr Justice Morgan that any injunction on unfair terms could only apply to future Foxtons’ contracts, rather than existing ones.

The Court of Appeal has now overturned this ruling, confirming the OFT’s long-held view that it can take enforcement action in relation to both existing and future contracts.

However, the fairness of the terms in Foxtons’ contracts has yet to be considered and the case is listed in the High Court during the week commencing 27th April.