OFT investigate 'misconceived' clause in agency's agreements with landlords

Acting in response to consumer complaints, the Office of Fair Trading (OFT) is seeking an injunction to prevent Chiswick based estate agency Foxtons using certain terms in its agreements with landlords.

The term is question states that a landlord must pay commission to Foxtons if a tenant stays in a property, even if Foxtons no longer manages the property.

No strangers to controversy, Foxtons were recently the subject of an undercover investigation conducted by The Times newspapers which found that a maintenance company, that carried out work on hundreds of rental properties managed by Foxtons, were reportedly forced to pass on a 20% premium to cover commission that Foxtons was charging them. The investigation also reported that the additional charge was on top of a management fee of 17% for landlords for letting and overseeing the properties.

A spokesperson for Foxtons said "As the OFT have pointed out they are treating this as a test case, we welcome the opportunity to have a court clarify the matters raised by the OFT," He added "We are of the opinion that they are fundamentally misconceived,"

February 28, 2008