Foxtons forced to reword contracts after OFT order

Estate agency Foxtons has been banned from using certain terms in its lettings agreement after the Office of Fair Trading today announced it had secured a high court order against the firm. The order follows a landmark judgment last summer, which found that clauses allowing the agency to charge landlords commission, even if it did not have to find them a new tenant, were not transparent and breached the Unfair Terms in Consumer Contracts Regulations 1999. The terms, which were not flagged up in sales literature, said Foxtons could ask landlords to pay substantial commission after the initial fixed period of tenancy had expired, even if it had no part in persuading the tenant to stay and no longer managed the property. The contracts also stated that even after a landlord had sold a property they could still be liable to pay Foxtons – if the sale was to the tenant, the estate agent could demand commission even if it had not negotiated the deal. The agency, which chose not to appeal the decision, has already made significant changes to its standard contract. The court order means it cannot enforce the terms in existing contracts or use them in new agreements with landlords. However it allows Foxtons to continue charging renewal commissions when it is providing an ongoing management service, and to retain commission it has already earned through enforcing the unfair terms. Jason Freeman, legal director of the OFT's Consumer Group, said: "We welcome the finality brought by this order, and the court's declaration that the terms we challenged are indeed unfair. "This case, and the changes Foxtons has now made, sends a wider message to letting agents and businesses in general that important terms, particularly those which may disadvantage consumers, must be clear, prominent and actively brought to people's attention. "Consumers should not be presented with a surprise bill for services they have not consciously agreed to." The OFT said it was writing to a number of letting agents to tell them they were expected to comply with the law as set out in the ruling and that it would take steps to ensure other firms did not break the law. Foxtons, which is known for its branded Minis, has 24 offices in London and the south east.