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The Ayatollah Buggeri

Foxtons Loses Case Over Landlord Fees

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Apologies if there's another thread - can't find one in the last three pages.


Foxtons, the estate agency, today lost a High Court case when a judge ruled that some of the terms and conditions it imposes on landlords are unclear and unfair. The Office of Fair Trading (OFT) took the property company to court over terms that force landlords to continue paying commission even if Foxtons is no longer involved in letting or managing a property.

The estate agent, founded by Jon Hunt with a single branch in Notting Hill in 1981, has previously said its terms were fair and the OFT court case was “fundamentally misconceivedâ€.

But this morning, Mr Justice Mann said that charging repeat renewal commission was a “trapâ€â€™ or a “timebomb†for consumers.

The judge added that such important terms must be flagged prominently not just in the contract, but also in any sales literature. He said a typical consumer would be unlikely to read standard terms with a great degree of attention and would not expect important obligations to be tucked away in the small print and not specifically brought to their attention.

The OFT said it would now ask the court to force Foxtons to remove the unfair terms and conditions if the agent did not do it voluntarily.

The competition watchdog, which brought its case after receiving numerous complaints against Foxtons, believes the practices are “widespread†in the industry and plans to pursue other agents if they do not comply.

Foxtons, which has already made some changes to its contracts, said that it welcomed the judgment which does not state that automatic renewal commissions are always unfair but rather that they can be in certain circumstances.

The National Landlords Association (NLA), a representative body for private residential landlords, welcomed a ruling that it said will see an end to unfair renewal fees for landlords where the letting agent has done nothing to earn the fee.

The NLA said many landlords were paying thousands of pounds in "totally unwarranted" commission.

Mr Hunt received more than £300 million when he sold Foxtons to BC Partners, a private equity firm, for £360 million before the credit crunch took hold. BC Partners has since conceded that the acquisition was a mistake and Foxtons has breached its banking covenant.

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Apologies if there's another thread - can't find one in the last three pages.


Thanks for posting this.

My contract states that I have to pay a £300 fee to the LA if I want to renew my AST, even though they were only finders and I now only deal with the landlord. When I first saw this I told them to remove it but they refused. I asked the agent to justify it and she said it was 'standard practice'. At the time I had already paid a £400 'non returnable holding deposit' so if I had walked away from the deal I would have lost the £400. At the time I was inexperienced at dealing with LAs and was also in a hurry to find a place so I accepted it. When the time comes I will refuse to pay and point them at this ruling, though it does look like it specifically relates to charges made on landlords and not tenants so it will be interesting to see what they say.

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I don't think this ruling is quite what the OFT were aiming for... essentially what it seems to say is that its ok for agents to get renewal payments even where they have had nothing to do with the remewal process as long as it is very clear and upfront in their terms and conditions.... its the layout of the terms and conditions which seems to have criticised not any of the practices themselves.

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  • 404 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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      • up 2.5%
      • up 5%

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