Foxtons loses landlord renewal fees battle in court

Friday, 10 July 2009 12:00

Estate agency Foxtons has lost a High Court battle to keep charging landlords commission even after the initial contract with the tenant has ended.

The Office of Fair Trading (OFT) took south-east based Foxtons to court after landlords complained about an 11 per cent renewal commission where a tenant stays beyond the initial agreed period, and a 2.5 per cent commission payment if the tenant wants to buy the property.

Konnie Huq, the former Blue Peter presenter, was one of the landlords who brought the issue into the public eye after her case was broadcast on the BBC's Watchdog.

The ruling, from Mr Justice Mann, found the charging of repeat renewal commission by Foxtons represented a 'trap' or a 'timebomb' for consumers.

OFT chief executive, John Fingleton, said: "This ruling sends out a clear and unambiguous message that businesses offering services need to ensure unexpected or surprising terms are not hidden away in small print.

"Contracts need to be written in clear and straightforward language with important provisions, particularly those which may disadvantage consumers as in this case, given prominence and actively brought to people's attention."

The National Landlords Association (NLA) vice chairman, John Socha, welcomed the ruling.

He said: "Mr Justice Mann has not ruled against renewal commissions per se, but has said - in no uncertain terms - that they must not be hidden in the small print. This ruling is most definitely a victory for the NLA and for landlords throughout the country."

The OFT will now ask the High Court to go on to grant injunctions preventing the continued use of the terms by Foxtons.

• Tags:
• news
,
• property
,
• rental property