Letting Agents in Limbo over Renewal Fees
Letting Agents wishing to enforce the payment of renewal fees by Landlords are in for a shock when they get to court. The small claims courts are refusing to make decisions on such cases pending the outcome of the upcoming legal case between Foxtons and the Office of Fair Trading (OFT).
In February this year the OFT issued High Court proceedings against Foxtons seeking a declaration on the application of the Unfair Terms in Consumer Contract Regulations 1999 to certain terms in Foxtons' lettings agreements with landlords. The OFT is also seeking an injunction against Foxtons preventing it from using the terms.
Letting Agents hoping that the status quo would remain until a decision had been made by the High Court will be disappointed if, as appears likely, the decision of District Judge Silverman, sitting in Edmonton County Court, to adjourn the case is to be followed by other judges.
“The first thing the judge asked me was how much I knew about the Foxtons case” Peter Barry’s Letting Manager Kris White told My Property Guide following last Friday’s hearing, “I said that I had read the newspaper report but as far as I was aware it was still ongoing. He then made it clear that he would not be making a decision until the outcome of that case was known and didn’t want to hear anything else that I had to say. After waiting several months to get to court the whole thing took no more than a couple of minutes”.
The OFT and Foxtons had a preliminary hearing on the 10th July 2008 to determine jurisdictional and procedural points. OFT spokeswoman Ferdus Ahmed said “We hope to get a date for the hearing of the substantive issues following this preliminary hearing. Dates for hearings are set by the courts and therefore the OFT is unable to say when the main hearing is likely to take place”
Letting Agent's renewal fees have long been a controversial topic. The contract term is pretty much standard for Letting Agents in the
The situation has been compared to that of the banks and the controversy over whether their charges are fair. Claims against the banks for recovery of charges have been adjourned in a similar fashion pending the outcome of a test case.
While the banks have the luxury of taking charges out of their customers’ account Letting Agents must hope that their Landlords pay up voluntarily while the situation remains in limbo.
Justin Burns MRICS
19th August 2008
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