The OFT is seeking an injunction to prevent Foxtons using certain terms in agreements with landlords.
It was claimed that customers had complained over terms that asked landlords to pay commission after the initial fixed period of the tenancy has expired, even if dealings with Foxtons had ended.
The OFT objected to Foxtons’ letting agreements which could potentially require landlords to pay the agent substantial sums in commission, even when a tenant continues to occupy the landlord’s property after the initial fixed period of the tenancy had expired – even if Foxtons played no part in persuading the tenant to stay, and no longer collected the rent or managed the property.
If the OFT is successful, it intends to enforce compliance with the law throughout the industry.
In a statement, Foxtons said: “These issues are of great relevance to the estate agency industry as a whole. We welcome the opportunity to have a court clarify the matters raised by the OFT as we are of the opinion that they are fundamentally misconceived.”
A spokesperson for the Association of Residential Letting Agents (ARLA), said: “The industry is going to watch this with interest as it is down to agents and landlords to determine the terms of a contract. What ARLA asks for is total transparency.”