A report in the Times today confirms,what we all suspected would happen as soon as the Banks decision was announced, ie that Foxtons will be appealing the High Court decision against them in the claim brought by the Office of Fair Trading.
As you will remember, the OFT brought a claim against Foxtons claiming that their contract terms relating to payment of commission on renewals where Foxtons were not managing the property, were in breach of the Unfair Terms in Consumer Contraacts Regulations 1999. In a decision reported in July 2009, Mr Justice Mann found against them (see here for links to my posts on the Foxtons v. OFT case).
The Times reports John Spence, of solicitors Thomson Snell & Passmore, as saying:
“Foxtons will be arguing that its renewal commission terms were [like bank charges] also part of the overall package they offered to landlords. However, Foxtons will still need to get over the hurdle that their renewal commission terms were also found not to be in ‘plain and intelligible language’, contrary to regulations.”
Pain Smith blog, in their brief post on this, considers that the appeal may not be relevant for agents whose renewal commission clauses are clearly drafted. However it is always possible that the Court of Appeal might make a ruling in respect of the enforceability of such clauses per se. Something Mr Justice Mann declined to do in his decision. We will have to wait and see.
In the meantime, all court claims being brought against Foxtons (and probably against other agents also) by landlords claiming refunds of commission paid by them under these clauses, will be stayed pending the outcome of this appeal. However this is probably many months away.
Note though that Foxtons will not be appealing the decision against them in respect of contract terms requiring landlords to pay commission in respect of property sales to the tenant. So any claims by landlords for repayment of commission under these clauses should be able to proceed.
Related posts:
The Landlord Law Blog from Tessa Shepperson
Hi, I found this site whilst researching my own dilemma. I am coming to the end of a contract with Leaders where they put a tenant in for me on a rent collection basis.
I would like to terminate leaders involvement in this tenancy but they have said that as long as this tenant remains in my property they will retain an interest based on the terms of the tenancy agreement I entered into.
So what can I do? The renewal is due in october, i have great relationship with this tenant and the only reason i involved an agent in the first place was becuase I was getting married at the time my previous tenant moved out and I couldn’t be doing with privately securing a tenant and arranging a wedding!
I realise your legal advice isnt free, but if you have any helpful links i would be most grateful!!
thanks.
Foxtons did not proceed with their appeal, and my final blog post on this is here: http://www.landlordlawblog.co.uk/2010/02/23/foxtons-case-concluded-now-is-the-time-for-agents-to-review-their-agency-agreements/
Whether similar clauses (ie not those considered by the Judge in the Foxtons case) are valid or not will depend on the particlar facts in each case.