Foxtons case leaves agents in limbo over renewals

The challenge to Foxtons, the London agents, by the Office of Fair Trading over the charging of renewal fees is continuing to have repercussions – which could prove costly – for agents all over the UK.

The OFT announced its HIgh Court action earlier this year and immediately agents found that until the case is resolved, courts would not hear their own actions when trying to chase landlords for renewal fees.

One of the first to discover this was Fisks, of  Essex and London, founded by John Pring.

Pring said that a landlord had been charged a renewal fee, as per the contract. “He put up what we felt was a rubbish defence, which he changed a few days before we went to court,” says Pring.

“His defence was that he had had an email from one of our members of staff saying that we would not be charging him a renewal fee. However, the email did not exist as the member of staff had already left our employment as we would have been able to prove.

“However, we were told that the court would not decide our case until the outcome of the OFT’s challenge to Foxtons.”

Another agent caught in limbo is Peter Barry, in London, whose case for claiming a renewal fee was heard in Edmonton county court last week. There the case was swiftly adjourned (https://www.mypropertyguide.co.uk/articles/display/10096/letting-agents-in-li).
 
“The first thing the judge asked me was how much I knew about the Foxtons case” Peter Barry’s letting manager Kris White said.
“I said that I had read the newspaper report but as far as I was aware it was still on-going. He then made it clear that he would not be making a decision until the outcome of that case was known and didn’t want to hear anything else that I had to say. After waiting several months to get to court, the whole thing took no more than a couple of minutes.”

However Fisks is about to go back to court to ask for a decision. This follows a preliminary hearing between Foxtons and the OFT on July 10, to discuss jurisdiction and procedural points ahead of the full hearing.

Pring says that his understanding is that it was ruled at the preliminary hearing that the outcome of the case could not be a global decision, but that each case had to be individually considered. However, a spokeswoman for Foxtons’ legal team said that nothing material had changed as a result of the preliminary hearing.

No date has yet been set for the full Foxtons hearing which hinges on whether landlords should adhere to the contracts they have signed, or whether the renewals clause is – as the OFT seems to argue – quite simply unfair.

Renewals fees, common in London and the south east but less so elsewhere, can contribute as much as one-third to agents’ revenue. The fear is that if the OFT wins, then agents might also have to repay renewal fees, possibly going back up to six years.