OFT v Foxtons – The Final Order
The final sealed order in the OFT v Foxtons case has been made available on the OFT website.
This order gives effect to the judgement of the High Court and is now the final word on the matter as Foxtons have withdrawn their appeal.
There are some interesting points to note:
- Nothing in the order prevents Foxtons from defending claims against them based on monies already paid under clauses that have now been found to be unfair;
- Foxtons are entitled to keep using the original renewal commission clauses in full management agreements;
- The wording of the offending clauses used by Foxtons is quite extreme in terms of their ability to charge commission on a long-term basis even where the tenant has been changed. The new terms (in the last Schedule) are much less severe.
- The approved terms are still charging a renewal commission even though Foxtons has no involvement in negotiating a renewal. Still, it is limited to 2 years after the initial tenancy and is clearly stated at the start of the business terms.
- Foxtons have removed their ability to take a fee where the landlord has sold the property to another landlord with the tenant in place and where the landlord has sold the property to the tenant.
The OFT has clarified in the press releases that it intends to use this decision to pressure other agents. How far this will go is unclear, and whether the OFT will seek to impose a limitation on other agents as to how long they can continue to collect a renewal commission.
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There are a number of options that can be considered for managing a property, depending on the owner’s own experience, skills and the amount of time that is available to be spent on the management process.