Foxtons defeated in County Court on 2nd Year Letting Commission Claim

I just thought that some of you might like to know that Foxtons were defeated yesterday (03/06/09) at Brentford County Court in the case of Foxtons Ltd v Willis Estates Ltd 03/06/09 Case No. 8LB03848

Foxtons unsuccessfully attempted to sue for unpaid second year lettings commission. I hope that this gives encouragement to other landlords to stand up for yourselves and not let Foxtons bully you into charging unfair 2nd year lettings commission. The case hinged on a point of contract Law, Foxtons terms and conditions were ammended by the landlord to clearly state that the fee payable was "11% of 1 years rent" this ammendment was verbally agreed, these terms were signed dated and faxed back to Foxtons on 19th January 2007. A two year letting of the property then took place on 22nd January 2007, with the tenancy agreement signed by both landlord and tenant, and the tenants had already paid their first months rent and deposit to Foxtons, the Judge held that the event that would trigger the entitlement of commission had then occured and that both a binding written and oral contract was in place limiting Foxtons to 11% of the 1st years rent. The tenancy start date was not until 3rd February 2007, and during the interim, Foxtons then threatened to not release keys to the tenant and to slot the tenants into an alternative property if an unamended set of terms and conditions was not signed together with receipt of a cheque for their 1st years Fees of 11% and a postdated cheque of their 2nd years Fees of 11%, the landlord had no option but to do this since the tenancy agreement had already been signed and the letting had taken place. So on 29th January 2007 the further set of terms and conditions was signed and faxed back to Foxtons, The cheques were then sent on 31st January. The Judge held that this further agreement was not supported by consideration on Foxtons part , since they were not committing to do anything further than they were already contractually obliged to do; further more it was held that unreasonable pressure was put on the landlord to sign the further agreement, the Judge held that the agreement dated 29th January was a void contract. As such the second year lettings commission was not due. In this particular case the instruction was for a lettings only contract, the landlord used his own tenancy agreement, and the landlord collected the rent directly.

 As I understand it in approximately 95% of cases Foxtons collect the rent directly (which they offer as a free service), although this enables them to deduct fees at source and would then put the honus on the landlord to sue them to try and re-claim the second years letting commission.

My advice to landlords is do not use Foxtons Tenancy Agreements, Collect the rent directly yourself and clearly agree and clarify that you will be paying a letting fee as a percentage of the first years rent only, make sure this is agreed prior to the letting taking place. If Foxtons will not agree to this then simply don't use them. There are plenty of other letting agents that will charge fair letting fees.

Had this case failed under contract law, I beleive that it would still have won under statute Law under the Unfair Terms in Consumer Contracts Regulations 1999. There is currently a case of The Office of Fair Trading v Foxtons in the High Court that was due to be heard in the week commencing 27th April 2009, I am not sure if the outcome of this case has been published yet.