A High court order has been secured against estate agent Foxtons following a dispute over hidden sales and commission terms in contracts drawn up for buy-to-let landlords. The case is likely to be of great significance to other landlords that have fallen victim to similar conditions.

The Office of Fair Trading (OFT) has responded by writing to a number of letting estate agents around the UK to draw attention to the High Court Order to ensure other companies are adhering to the example set out by the ruling.

The order issued by the High Court ruled that certain terms and conditions regarding sales and commission in its contracts were unfair and not being displayed clearly.

The unfair terms included:

• A requirement that the landlord should pay commission of 11% of the annual rent if a tenant stays in the property beyond the initial term.
   
• Demands of 2.5% commission from the property’s price should the landlord sell to his or her tenant, even if they had not helped to broker the deal.

The Judge overseeing the case, Mr Justice Mann, stated that important terms like these had not been made prominent enough in either the contract or sales literature issued to the landlord.

Jason Freeman, Legal Director of the OFT, underlined that the OFT would be taking the necessary steps to ensure that letting agents are treating landlords fairly and in line with the recent ruling. He went on to say:

"This case, and the changes Foxtons has now made, sends a wider message to letting agents and businesses in general that important terms, particularly those which may disadvantage consumers, must be clear, prominent and actively brought to people's attention.”