Foxtons and the Rent Renewal Clause

The Judgement in the OFT v Foxtons considered the standard term contract between Foxtons and the Landlord.  The clause which was the typical wording of the clause is set out below.  It must be remembered that since the test case Foxtons have altered their standard term contracts.

A issue with landlords are rent renewal fees or commissions. 

Rent renewal fees or commisions appears to be a south of England issue due to the very high rental yeilds.
Landlords are told about the commission they have to pay when the letting agent finds a tenant typically in the region of 10% of the yearly income.  The landlord then pays this fee and when the year comes to an end, the letting agent informs the landlord that as the tenant has signed up for another year, the landlord has to pay a further 10% again and again and again etc until such time as the tenant leave the premises.

LETTING AGENT FEES - LAWFUL OR NOT IN 2011?

Following the important test case of the OFT v Foxtons in the High Court the Judgement in that case has been found to favour of the Landlord rather than the Letting Agent. In general terms the Judge in the Foxtons letting fees case decided that the terms and conditions in the agreement were held to be unfair for the purpose of the unfair terms in consumer contract regulations.  At R James Hutcheon Solicitors we have managed to win in court twice and recover over £20,000 in letting fee commissions against Foxtons in an out of court settlement.

The OFT Welcomes High Court Decision on Foxtons' Use of Unfair Terms

The OFT has today welcomed a landmark High Court ruling that certain terms and conditions used by Foxtons Ltd in its lettings agreements with landlords are unfair.
As a result of this ruling, made in proceedings brought by the OFT under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), the OFT will now ask the High Court to go on to grant injunctions preventing the continued use of the terms by Foxtons.

Full OFT vs Foxtons News Release on OFT Website - Click Here

OFT v Foxtons - Full Court Judgement Before Mr Justice Mann - High Court of Justice 10 July 2009

The Office of Fair Trading (OFT) has made the decision to take Foxtons, a letting agency and estate agents, to court over unfair contract terms and fees charged to private landlords.

Atkinson McLeod lost their claim for Renewal Fees at the Brentford County Court, not only did Atkinson McLeod lose but they were ordered to repay rent renewal commissions back to the Landlord represented by R James Hutcheon Solicitors

This article represents a request to private landlords for supporting information regarding the practice of unfair tenancy renewal fees charged as a matter of course by letting agents.

An update from the Office of Fair Trading regarding the OFT Vs Foxtons' case can be found below: