Are a letting agent’s terms unfair? The OFT is going to court to find out.

Giles — Tue, 26 Feb 2008 11:20:42 +0000

The OFT (Office of Fair Trading) has issued High Court proceedings against a letting agent whose terms can potentially require landlords to pay the agent 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 the agent plays no part in persuading the tenant to stay, and no longer collects the rent or manages the property. The terms can also require the landlord to pay these sums after the landlord has sold the property as well as demanding commission where the landlord sells the property to the tenant, even where the agent has played no part in negotiating that sale.

The letting agent is Foxtons and the OFT’s action is for 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.

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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Are a letting agent’s terms unfair? The OFT is going to court to find out.