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OFT vs Foxtons Case Update
- By Rent Collection Solicitor
- Published 8/07/2008
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OFT Vs Foxtons Case Update
An update from the Office of Fair Trading regarding the OFT Vs Foxtons' case can be found below:
Unfair Terms in Consumer Contracts Regulations 1999 (‘the Regulations’) RE: Foxtons Limited (‘the Company’)
OFT’s court action against Foxtons
The OFT has issued High Court proceedings against Foxtons Limited seeking a declaration on the application of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) to certain terms in Foxtons' lettings agreements with landlords. The OFT is also seeking an injunction against Foxtons preventing it from using the terms. The action taken by the OFT is in response to consumer complaints. If successful in this case the OFT intends to enforce compliance with the law, as declared by the Court, 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, and accordingly, the OFT has issued proceedings so the courts can decide the matter. Please visit http://www.oft.gov.uk/news/press/2008/28-08 for more information.
An interim hearing which will cover jurisdictional issues under the Unfair Terms in Consumer Contracts Regulations 1999 and further directions is set to take place on 8 July 2008. However, we do not have a date yet for the substantive hearing.
I hope you find this helpful.
Yours sincerely
Karine Doger de Speville
Enquiries and Reporting Centre
Unfair Terms in Consumer Contracts Regulations 1999 (‘the Regulations’) RE: Foxtons Limited (‘the Company’)
OFT’s court action against Foxtons
The OFT has issued High Court proceedings against Foxtons Limited seeking a declaration on the application of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) to certain terms in Foxtons' lettings agreements with landlords. The OFT is also seeking an injunction against Foxtons preventing it from using the terms. The action taken by the OFT is in response to consumer complaints. If successful in this case the OFT intends to enforce compliance with the law, as declared by the Court, 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, and accordingly, the OFT has issued proceedings so the courts can decide the matter. Please visit http://www.oft.gov.uk/news/press/2008/28-08 for more information.
An interim hearing which will cover jurisdictional issues under the Unfair Terms in Consumer Contracts Regulations 1999 and further directions is set to take place on 8 July 2008. However, we do not have a date yet for the substantive hearing.
I hope you find this helpful.
Yours sincerely
Karine Doger de Speville
Enquiries and Reporting Centre
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4 Responses to "OFT vs Foxtons Case Update" 
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said this on 09 Jul 2008 8:38:57 AM BST
Thanks for the information, we will be waiting the results with baited breath. Apart from this we would like to point out that for a fee of over Pds 3000 per year our agent did NOTHING.
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said this on 09 Jul 2008 9:49:37 AM BST
For Non-management/let only services, I agree, an Agent charging another lot of fees for doing basically nothing is uncalled for. But what about management services? Could it be possible for a Landlord (after a fixed term contract has expired, and according to any management agreement) give required notice and keep existing tenants, and go it alone? Is a similar thing with bank fees also going to happen as well, and landlords will claim past fees charged?
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said this on 09 Jul 2008 10:01:30 AM BST
It is possible that landlords will attempt to reclaim the tenancy renewal fees that they have paid in the last 6 years yes. The OFT clearly believe that the likes of Foxtons have been charging these fees unlawfully and this is why they are trying to obtain a High Court Judgement to that effect. If the OFT are successful in their claim then landlords should be well within their rights to ask for all of their money back from the letting agency. This is essentially the same area of law as the bank penalty charges case and the repayment principles are similar too.
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said this on 24 Jul 2008 4:22:50 PM BST
Please keep me posted on the development on this case.
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