Landlords have been offered protection from unfair fees and contract terms today, after the Office of Fair Trading (OFT) issued guidance on agency agreements.
The OFT has been investigating fees and terms 'hidden' in the small print of contracts provided by Foxtons, following a High Court ruling that the agreements provided by the agency were unfair. Foxtons had been demanding 2.5 per cent of the sale price if the property was sold to a tenant, as well as 11 per cent of the rent if the tenant stayed on past the term agreed with Foxtons - despite the fact that the agent played no part in these transactions.
Foxtons has since changed their contracts. But the OFT has been concerned that similar practices are carried out by other estate agents, and is now writing to a number of firms and trade bodies warning that they must adhere to the precedent set by the High Court ruling.
In practice this means that agents must properly flag up any terms of this sort, and are unable to insert unfair fees or clauses into their contracts. Any fees must be clearly set out and agreed from the outset.
The OFT has also warned that it will take "necessary steps" to ensure that industry players are complying with the ruling.
