Court case begins on 'unfair' charges

01/05/2009

A landmark ruling in court on letting fees is approaching.

The Office of Fair Trading (OFT) has brought an action against estate agent Foxtons, over what it sees as its unfair fees system - which begun in the High Court this week.

If successful, the OFT will force agents to change their terms and conditions to make them more favourable to landlords.

One of the central arguments is that Foxtons' contracts are difficult to understand - meaning that some landlords unknowingly sign up to a tough fee system, which includes paying commission to the agents for as long as the tenants stay in a property.

This can then put financial pressure on the landlords - and possibly even tip them towards repossession.

Smartlandlord.co.uk, a specialist website, threw its weight behind the OFT yesterday.

"Landlords, particularly new landlords, often find the wording of lettings agents' contracts confusing," it said in a statement.

"The practice of charging commission for renewal of tenancies that have not been managed by the letting agent is completely unjustified and must be scrapped, but with such a widespread practise, it will take time for all lettings agents to comply and many may dig their heels in at a time when they rely on lettings commissions for a large proportion of their income. Landlords using agents need to ensure they read contracts thoroughly and question anything they don't understand or don't agree with.

"Otherwise they risk being stung later by hefty charges they don't expect."

Tags; Budgeting Advice, Credit Card Lifestyle, Recent Graduate Debt,

• Share
• 
• 
• Store
• 
• Follow
•