Two property web-sites have been reporting that Foxtons have withdrawn their appeal to the Court of Appeal against the High Court decision against them last year. You will find a summary (as at October 2009) of my other posts on the OFT v. Foxtons case here.
The two articles that I have seen are on the PainSmith Blog and on Estate Agent Todays news page. I have not been able to find anything on the Foxtons site and a Google news search brings up little else. However both the sites quoted are pretty reliable so I think we can take it that the Foxtons appeal is off.
Speaking as a lawyer, this is a great shame as it would have been a good opportunity for the Court of Appeal to clarify the law, not only as to what sort of clauses (in particular clauses regarding renewal commission) are acceptable, but also perhaps with some guidance on the interpretation of the Unfair Terms in Consumer Contracts Regulations 1999. We get too few cases on this.
The reason given for Foxtons’ decision is that they now have new terms and conditions which have satisfied the OFT. It seems that these provide for renewal commission, but only for two years and at a lower rate than the initial commission paid.
I have to say that does not sound unreasonable to me, as it is arguable that landlords are benefiting during those two years from the work done by the agent in finding a good tenant who stays on so the landlord does not have any voids. It was the open ended element of the previous clause which was so objectionable.
However, this does leave open the question of what do landlords who have paid commission in the past do now? The answer I suppose is that “it depends”. If the commission was charged by Foxtons under the clauses which were criticised by the Judge in the High Court decision, they should be entitled to a refund, and should contact Foxtons to ask for this.
However, as regards other claims, for example against other agents and differntly worded clauses, it will depend very much on the circumstances of the particular case. Commission charged in circumstances similar to those in the Foxtons case examples, may well be recoverable. However, if the renewal was at a lower rate and the clause was fully explained to the landlord before he signed, probably not.
It is an unsatisfactory aspect of our legal system, that clarification in the law is so often dependent upon whether a company is prepared or not to finance an appeal in circumstances where matters are unclear.