Unfair Foxtons contracts

Estate agency Foxtons has been criticised by a High Court judge for imposing what were called “trap” and “time-bomb” conditions on landlords.

Foxtons demanded up to 11 per cent commission if a tenant renewed their contract. The National Landlords Association had fought the imposition of such fees for nearly two years. Its defence and the criticism of Foxtons has been hailed as a victory for landlords.

There had been reports of landlords being charged 11 per cent by Foxtons on the first year’s rent and another 11 per cent up front if the tenant wanted to renew their contract.

John Socha, of the NLA, was reported as saying the findings “ sent a direct message to letting agents that this lack of transparency must stop.”

The Office of Fair Trading brought the case against Foxtons after receiving numerous complaints about Foxtons terms in its contracts with landlords.

They included clauses about landlords having to pay full commission fees to Foxtons of 2.5 per cent if the home was sold to the tenant.

Foxtons was alleged to have demanded large sums in commission when a tenant stayed in a rental property beyond the initial rental period. Commission applied even if Foxtons had done nothing to persuade the tenant to stay and had not collected the rent.

Mr. Justice Mann said landlords would be “ astonished ”to find they had to pay Foxtons commission for the sale of a property even if the agency had played no part in the sale.

The judge agreed that the conditions were in the small print and not in “plain and intelligible language.” The OFT said unexpected terms in con tracts should not be buried away. “ Contracts need to be in clear and straightforward language,” the OFT said.

Foxtons said it had now altered the wording of its contracts with landlords and reduced its renewal commission charges.