Foxtons letting agent renewal fee case - Latest from Lawrenson of LettingFocus
Well, landlord law guru Tessa Shepperon recently sent me an update on the ongoing case.
The background to the case that the Office of Fair Trading (OFT) has against Foxtons Ltd (the letting agents) is about their refusal to agree that certain terms in their letting agency contracts with landlords are unfair under the Unfair Terms in Consumer Contracts Regulations 1999.
One of these terms relates to repeat fees imposed on landlords where the initial fixed term in the original tenancy has come to an end.
Many a landlord (who never bothered to read the contract they signed with their letting agent properly) has suddenly woken up to the fact that their letting agent is trying to hit them for a further set of fees long after the initial job of finding the tenant has been completed.
One side issue in the case was whether any injunction brought against Foxtons could affect current letting agency contracts as well as future ones.
Initially, the first Judge had accepted Foxtons’ argument that any injunction about unfair terms could only apply to future contracts. Bad news for landlords!
But, we now had some good news because the Court of Appeal (bless their cotton socks) has now overturned this initial ruling, thus confirming the OFT's view that it can take enforcement action under the legislation to protect consumers in relation to existing contracts too.
Indeed, the Court of Appeal stated that the unfair terms legislation’s aim was to protect ALL consumers, never mind when the contract was signed.
LETTING AGENCY RENEWAL FEES AND LANDLORDS
What this means is that if you are a landlord with a letting agency contract with Foxtons, they should not now levy any charges under the disputed clauses on you until after the main action has been heard.
And, as you asked, the main action - i.e. on whether the terms in question are actually unfair or not under the regs – should be heard by the High Court in the week commencing 27 April.
You should be following this case if any letting agency has tried to impose renewal charges on you for finding a tenant long after the tenant’s initial term has ended.
Hundreds of thousands of landlords could be affected and letting agencies could face huge claims and loss of fuure cash flows if the landlords win this one.
We will keep you posted.
Update 10/7/9 - Foxtons has lost the case. Please go to: http://www.lettingfocus.com/2009/07/foxtons-loses-unfair-letting-renewal.html to read more.
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Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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