To sign up for the Landlord Law Newsletter (and get a free guide)>> Click Here

Tag Archives: OFT v. Foxtons

Is my letting agent entitled to this money for nothing?

Outraged landlordHere is a question to the blog clinic from Veena who is a landlord

I have used an agent for letting my property for the last 5 years it has always been yearly contracts. This time the tenant is staying on for two years and the agent has sent a bill for 7% as a renewal fee (last year was 8%).

They have had to do absolutely nothing as the rent increase was agreed at the start of the tenancy. I have just paid over £2000.00 for them to do absolutely nothing.

When I queried it with the agent, that I was not aware of this renewal fee, they send an agreement which I had signed in 2009. Surely, when they knew these tenants were going to stay on for at least two years, they should have brought this to my attention there and then rather than referring me to a document signed in 2009.

It is a lot of money for doing ‘nothing’

Your advise would be appreciated.

This is a common landlord complaint.  Landlords consider that agents should not be entitled to receive a fee when they have done nothing for it.

Agents on the other hand argue that it is due to their careful choice of tenant that the landlord has a continuing tenancy with no voids.

The situation was considered by the Courts in the 2010 case of Office of Fair Trading v. Foxtons, and you will find links to the posts I wrote on this here.

The Foxtons case

The case was brought under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) and so the judgement can only be used by landlords who are ‘consumers’ – in this context landlords who are not ‘professional’ landlords.

The case concerned specifically certain clauses in Foxtons agency agreements with their landlords the most important of which was a clause regarding continuing commission where, as in your situation, the agents had not done any work as they were not managing agents and the tenant was simply staying on in the property.

The Judge held that the clause was invalid because

  • It was hidden in the ‘small print’ of the agreement and had not properly been drawn to the attention of the landlord before he signed,
  • It was not the sort of thing a normal landlord would expect to pay, and
  • It was the sort of thing that, if the landlord was using a lawyer, the lawyer would ask to have removed

(You can see the full report and reasons here).  However he did not say that renewal commission was unfair per se.

Foxtons were going to appeal the decision but later reached agreement with the OFT that they would not object to a clause which was suitably prominent and which only provided for commission for two years at a lower rate.

Your case

I suspect that your situation will be similar and it is highly likely that the clause in your agency agreement will be found to be invalid (should it be considered by a Judge) for the same reasons that the Foxtons clause was.

Things are a little difficult as you have already paid the invoice – it would have been better for you to refuse to pay on the basis that the cause is invalid per the UTCCR and the Foxtons case.

However there is no harm in writing to them saying that you have now learned that the clause is invalid (under the Foxtons case)  and requesting a refund.

Alternatively, if there are any other fees due to them you could seek to offset the fee you have already paid for the renewal commission.

How to get rid of your letting agent – a new guide for landlords

Agency problems

I announce a new service on Landlord Law – a guide to help landlords who are having difficulties getting rid of their letting agents – particularly where the agents are in breach of their agency agreementContinue Reading

OFT v. Foxtons case costs Foxtons £4.4 million?

Foxtons

Regular readers of this blog will remember the Office of Fair Trading v. Foxtons case a couple of years ago. Foxtons were sued by the OFT claiming that three of their landlord agency agreement terms were unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (see a summary of my blog posts here). ToContinue Reading

Agents renewal commission is unfair says Judge

Agents need to be careful with commission renewal clauses

After the Foxtons case, many landlords wondered how the courts would treat renewal commission clauses in landlords contracts with their letting agents. A recent case reported in the Legal Action Magazine is interesting. The case is Chesterton Global Ltd v. Finney, Lambeth County Court, 30 April 2010 (it has been previously reported on the PainContinue Reading

OFT v Foxtons case summary of posts

Foxtons

This summary of my posts on the Office of Fair Trading v. Foxtons case was written last year but I have done a few posts since then.  So it is being updated so it includes my later posts on the Foxtons litigation, which is now concluded. OFT Victory in Foxtons unfair contract terms case. ThisContinue Reading

Foxtons case concluded – now is the time for agents to review their agency agreements

Foxtons logo

I have just learned that a final order has been made in the case of the Office of Fair Trading v. Foxtons, which I have written about in the past (see here). Foxtons have now made ‘significant changes’ to its standard terms and conditions which have satisfied the OFT ‘including making the liability to payContinue Reading

Foxtons withdraws appeal

Foxtons logo

Two property web-sites have been reporting that Foxtons have withdrawn their appeal to the Court of Appeal against the High Court decision against them last year.  You will find a summary (as at October 2009) of my other posts on the OFT v. Foxtons case  here. The two articles that I have seen are on the PainSmith Blog andContinue Reading



The Landlord Law Blog from Tessa Shepperson

Tessa is an English lawyer specialising in residential landlord and tenant law.


Legal Services

Legal services are provided via Tessa's online service Landlord Law. Some advice services are provided by Tessa, other legal services are provided by specialist housing firm Anthony Gold.


Disclaimer

The purpose of this blog is to provide information, comment and discussion. Although Tessa, or guest bloggers, may from time to time, give helpful comments to readers' questions, these can only be based on the information given by the reader in his or her comment, which may not contain all material facts. Any comments or suggestions provided by Tessa or any guest bloggers should not therefore be relied upon as a substitute for legal advice from a qualified lawyer regarding any actual legal issue or dispute.


Nothing on this website should be construed as legal advice or perceived as creating a solicitor-client relationship (apart from the Fast Track block clinic service - so far as the questioners only are concerned).


Guest bloggers

Please note that any opinion expressed by a guest blogger is his or hers alone, and does not necessarily reflect the views of Tessa Shepperson, or the other writers on this blog.


Other websites from Tessa

Lodger Landlord | School for Landlords | Google+ | Your Law Store | Google | Landlord Law facebook page | Tenancy Agreements Manual | How to Evict Your Tenant website | the Which Tenancy Agreement Guide | Landlords Tips | Tenants Tips