All Renewal Commission Clauses Against Landlords must now be Unfair-Right? – Well Not Quite.

Paul Hajek | 15 Jul 2009

There has been a lot of speculation on the future of renewal clauses in contracts between Letting Agents and Landlords following the recent Foxtons case.

The High Court found that Foxtons clauses were unfair and therefore unenforceable.

However, Mr. Justice Mann was at pains to point out that “ I am not making any finding that renewal commission per se, cannot be part of the core bargain and be immune from a fairness challenge…I am not even finding that Foxtons renewal commission within this contractual framework would be incapable of becoming part of the core bargain”

It seems clear from press release form the Office of Fair Trading (OFT) that a return to court is likely. The OFT has confirmed that whilst Foxtons has reduced its renewal fees and rewritten both its contracts and marketing literature to highlight its renewal charges, it is still continuing to make renewal charges.

The OFT’s present opinion is that, there are two sides to fairness: first, there is the issue of transparency. But second, it is not fair if businesses are taking advantage of consumers’ lack of choice or inability to defend their own interests.

We have not heard the end of the saga of renewal commissions.

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