“Time-Bomb; Trap: Ambush”: High Court judge says “choose your own surprise metaphor” in Foxtons Landlords’ Renewal Commission case

A High Court judge has ruled that Foxtons, one of London’s most well known Estate Agents, had used unfair terms in its lettings agreement with their Landlord clients .The case had been brought by the Office of Fair Trading.

Unfair Consumer Clauses

The three clauses in question were:

1. Foxtons were entitled to demand a renewal commission, where the
   original tenant committed to a further term beyond the original period, even where Foxtons had no input into the new negotiations.

2. Foxtons were entitled to renewal commission where the property had been sold subject to the Tenancy- so called third party commission 

3. Foxtons were entitled to a 2.5 % commission on the sale of the property where the Tenant eventually purchased the property, even where Foxtons                  were not  part of the sale negotiations, and may even had been sold by another Estate Agent.

The judge held that all three clauses were not exempted from a consideration of fairness by regulation 6 of the Unfair Terms in Consumer Contracts Regulations 1999.

The judge held that the offending clauses were buried deep in the small print on pages three and four of the four page contracts. Mr. Justice Mann commented that “the renewal commission is severely camouflaged. The risk of ambush or time bomb, or any similar surprise metaphor is even greater and the term more clearly unfair.”

Foxtons now claim that there new contracts have had the offending clauses removed.

Both OFT and Foxtons were said to be pleased with the judgment.

If you as a Landlord are unsure of the full importance of the terms of your Letting Agreement, we at Clutton Cox ,would be happy to assist you in drawing your attention to any unfair terms which may exist in the light of the Foxton’s case.

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