The news last week that Foxtons has decided to abandon it's high court challenge against the previous ruling on the charging of tenancy renewal fees may seem surprising.However, in many ways it is not.....
The original decision last Summer gave many landlords an unrealistic expectation that it was only a matter of time before they would be able to claim back thousands of pounds in letting agents fees. However, this ideas may well be misfounded.
If we go back to the original decision by Mr Justice Mann the decision on the case related purely to the way the terms and conditions in the Foxtons agreement were worded and as to whether they were unfair when managed against the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). He ruled they were describing them as a 'trap' or 'timebomb'.
Foxtons appears to have done the sensible thing. They have reworded their contracts so that the clauses relating to renewal fees is no longer buried obscurely in the contract and the OFT and courts have accepted these. In a press release on Wednesday Foxtons indicated that they had a set of new terms of business with new terms and a renewal commission at a lower rate than the initial commission and do not seek to charge that renewal charge for more than two years.
It seems that no letting agent wants to confront full on the legality of the 'renewal fees' issue for fear of potentially loosing them and then also having to pay back all the previous letting agency renewal fees.
It looks like letting agents will have to be pushed into a test case to establish this. Any well healed landlords volunteering?
For more info have a look at this Citywire story.
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