 Court Decision Means Letting Agents Need to Review Terms of Business
 James Woodhouse Letting agents should review their terms of business following a ruling in the High Court on Friday (10 July) which decided that commission fees being charged to landlords were unfair.
The case was brought by the Office of Fair Trading against the letting agents, Foxtons. The OFT will now seek to obtain injunctions preventing Foxtons charging commission on this basis. Foxtons could also face expensive compensation claims for the recovery of commission charged.
James Woodhouse, litigation solicitor with Charles Lucas and Marshall, who previously acted for a client in a dispute with Foxtons over renewal commission, said the basis of the decision was that Foxton's terms and conditions to landlords were not clear.
"The court's decision was based upon Foxtons' failure to flag up rather onerous terms to clients at the outset," he said. "Letting agents need to ensure their standard terms of business are clear and intelligible. Potentially disadvantageous terms, which are not drawn to the attention of clients before the contract is entered into, may be struck down."
The OFT commenced legal action against Foxtons in February 2008 after receiving complaints about the amount of commission Foxtons was charging its landlord clients. The OFT contended that Foxtons' letting agreement included terms that were unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999. In particular, Foxtons' terms of business included the following provisions:
The Unfair Terms in Consumer Contracts Regulations provide that any terms which result in a significant imbalance in the parties' rights and obligations and which are to the detriment of consumers will be unfair and ultimately unenforceable.
You can contact James on 01635 521212 or james.woodhouse@clmlaw.co.uk
James Woodhouse (contact details):
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