Court challenge to unfair letting agency terms

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by Gill Montia

The Office of Fair Trading (OFT) is bringing a test case regarding letting terms against Foxtons, the estate agent.

The agent, which is a mainly London-based, has been criticised for some of its operating methods, which the OFT believes breach the Unfair Terms in Consumer Contracts Regulations.

According to the OFT, Foxtons’ lettings agreements require landlords to pay substantial sums in commission if tenants opt to stay after the initial fixed period of the tenancy has expired.

The commission is charged regardless of whether the estate agent has played a part in persuading the tenant to renew their agreement, and despite the fact that Foxtons no longer collects rent or manages the property.

It is alleged that landlords have even been forced to pay commission after they have sold a property.

If the High Court rules in favour of the OFT, the regulator plans to enforce compliance throughout the letting industry and abolish such terms, wherever they are being used.

Foxtons has defended its agreements, which it maintains are fair, and the OFT has therefore issued proceedings to let the courts decide.