Landlord fairness case 'has implications for tenants'

15/04/2009

An upcoming High Court test case could have big implications for Britain's landlords, letting agents and tenants.

The test case, to be heard in a fortnight's time, will decide whether or not fees charged by letting agent Foxtons are fair, Citywire reports.

Proceedings against the agent were started by the Office of Fair Trading (OFT) last year.

Landlords have often complained of what they see as unfairly high charges from the agents - which can translate into higher rental costs for tenants.

Figures cited by the news source suggest that letting agents charge ten per cent commission for finding someone to rent out a property on behalf of the landlord.

At issue in the High Court case is Foxtons' practice of charging a fee when the tenant renews his or her lease.

This charge is levied even if the letting agent did not play a part in the renewal.

Should the OFT win its case, the fee system could be overhauled.

Since the calling of the test case, the court upheld Foxtons' claim that any decision on fairness would only legally apply to future, rather than current, contracts between landlords and agents.

This decision was then overturned by the Court of Appeal.

The fairness of the fees themselves has not been determined - and will be decided at the upcoming High Court hearing later this month.

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