OFT takes Foxtons to court

Assured Shorthold Tenancy

OFT takes Foxtons to court

In February 2008 the OFT issued High Court proceedings against the estate agency in respect of the fairness of standard terms of its letting agreements with landlords. Foxton’s letting agreements state that a landlord can still be liable to pay commission to Foxtons even where the initial fixed period of an assured shorthold tenancy has expired and the agency is not responsible for persuading the tenant to stay. The agency also demands commission if the tenant purchases the property from the tenant, even where it did not negotiate the sale.

 

The OFT sought a declaration from the court on whether the terms breach the Unfair Terms in Consumer Regulations 1999, and asked for an injunction against Foxtons to prevent it using the terms in future. The Court of Appeal has allowed the appeal of the OFT against a decision in the High Court in which the judge accepted Foxtons’ argument that any injunction on unfair terms could only apply to future contracts. The Court of Appeal overturned the High Court decision, holding that the OFT can take enforcement action under the Unfair Terms in Consumer Contracts Regulations to protect consumers in relation to both existing and future contracts.

 

OFT Press Release, 2nd April 2009