OFT seeks injunction against estate agents Foxtons

[Massimo A. Allamandola]

OFT seeks court order against letting agent Foxtons

http://www.oft.gov.uk/news/press/2008/28-08

28/08 25 February 2008

The OFT has issued High Court proceedings against Foxtons Limited 
seeking a declaration on the application of the Unfair Terms in Consumer 
Contract Regulations 1999 (UTCCRs) to certain terms in Foxtons' lettings 
agreements with landlords. The OFT is also seeking an injunction against 
Foxtons preventing it from using the terms.

The action taken by the OFT is in response to consumer complaints. If 
successful in this case the OFT intends to enforce compliance with the 
law, as declared by the Court, throughout the letting industry wherever 
similar terms are being used.

The terms to which the OFT objects in Foxtons' letting agreements can 
potentially require landlords to pay Foxtons substantial sums in 
commission, where a tenant continues to occupy the landlord's property 
after the initial fixed period of the tenancy has expired - even if 
Foxtons plays no part in persuading the tenant to stay, and no longer 
collects the rent or manages the property. Foxtons' terms can also 
require the landlord to pay these sums after the landlord has sold the 
property. The terms also demand commission where the landlord sells the 
property to the tenant, even where Foxtons has played no part in 
negotiating that sale.

Foxtons contends that its agreements with landlords are not unfair and 
continues to use these terms, and accordingly, the OFT has issued 
proceedings so the courts can decide the matter.

NOTES

1. The OFT is seeking an enforcement order against Foxtons Limited under 
the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).

2. The UTCCRs apply to standard contract terms with consumers. The 
UTCCRs protect consumers against unfair standard terms in contracts they 
make with traders. The OFT, and certain other qualifying bodies (such as 
local authority trading standards, national regulatory bodies, and 
Which?) can take legal action to prevent the use of potentially unfair 
terms. A term is likely to be considered unfair if, contrary to the 
requirement of good faith, it causes a significant imbalance in the 
parties' rights and obligations under the contract, to the detriment of 
consumers. The regulations say that a consumer is not bound by a 
standard term in a contract with a trader if that term is unfair. 
Ultimately, only a court can decide whether a term is unfair.

3. It is estimated in the lettings industry that there are at least 
15,000 letting agency businesses in the UK, including a number of 
national and multi-national companies in addition to many smaller 
businesses.


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OFT seeks injunction against estate agents Foxtons

10:26 | 26.02.08
http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3107195&c=1

The Office of Fair trading (OFT) has issued High Court proceedings 
against residential estate agency Foxtons in relation to certain terms 
in Foxtons’ lettings agreements with landlords and is seeking an 
injunction preventing it from using the terms.

By Deirdre Hipwell

The OFT objects to Foxtons' letting agreements which can potentially 
require landlords to pay it substantial sums in commission, where a 
tenant continues to occupy the landlord's property after the initial 
fixed period of the tenancy has expired. The commissions are due even if 
Foxtons plays no part in persuading the tenant to stay, and no longer 
collects the rent or manages the property.

Foxtons' terms can also require the landlord to pay these sums after the 
landlord has sold the property. The terms also demand commission where 
the landlord sells the property to the tenant, even where Foxtons has 
played no part in negotiating that sale.

Consumer complaints
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The OFT said is taking the action in response to consumer complaints and 
if successful in this case the OFT said it intends to enforce compliance 
with the law, as declared by the Court, throughout the letting industry 
wherever similar terms are being used.

Foxtons contends that its agreements with landlords are not unfair and 
continues to use these terms, and accordingly, the OFT has issued 
proceedings so the courts can decide the matter.



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