Lawyers are attempting to bring a group claim against Foxtons estate agents on behalf of landlords charged commission for repairs and maintenance to their properties.
Law firm Leigh Day’s claim is based on allegations that Foxtons has been charging “hidden” commission of as much as 33 per cent of a contractor’s fee without obtaining landlords’ consent.
It is also alleged that the estate agent has used contractors who charge up to three times the market rate for jobs and is not open with landlords about fees.
Leigh Day said: “It seems likely that the practice of not getting landlords’ fully informed consent for these types of fees is not limited to Foxtons and may be widespread in the lettings industry.”
It is thought that potential claims could amount to up to £15,000 for landlords whose properties were managed by Foxtons.
Dr Chris Townley (pictured above), a lecturer in competition law at King’s College London, is a Leigh Day client. The former principal case officer for the Office of Fair Trading let out his London home in 2011 and engaged Foxtons to let and manage it.
(Picture: Chris Townley)
(Picture: Chris Townley)
During this time, Leigh Day said Foxtons received permission for contractors to carry out work at Dr Townley’s home, but he was dissastisfied with the installation of a security light (see pictures above).
He contacted the contractor, who said that if his complaint was accepted, he would receive a refund. He had been invoiced £550, but the contractor’s charge was £412.50, with the rest taken in commission by Foxtons. Additional fees and VAT pushed the cost up to £616.
Leigh Day said Foxtons had refused to repay the commission and admitted to Dr Townley that it had received similar payments from previous jobs amounting to £1,900.
Dr Townley told Channel 4 News: “I feel betrayed… I paid Foxtons to act on my behalf. Now I just want my money back. I’m not sad, I just want my money back.”
Chris Haan, a solicitor at Leigh Day, said: “We consider that Foxtons has a potential conflict of interest in that the more expensive the contractor is, the more Foxtons makes in hidden commissions.
“We believe these charges to landlords are unlawful as they are not sufficiently disclosed, so the landlords cannot give fully informed consent to them. This is against industry codes of practice.
“These kinds of practices may be widespread in the lettings industry and it needs to stop. We are taking this case on no win no fee with the aim of securing a refund from Foxtons for all affected landlords.”
In a statement, Foxtons said: “We are incredibly disappointed to hear when any customer is dissatisfied with the service they have received, however, as a legal dispute we are not in a position to comment on the specifics of this case.
“We are satisfied though that our fees are clearly laid out within our terms and conditions and that approvals are obtained from our landlords before works commence on their property.
“As part of our managed service to our landlords we arrange for maintenance works to be carried out on their behalf from a panel of carefully vetted and trusted contractors.
“Due to the volume of work we provide we are able to achieve discounted rates offering competitive value with the benefit of efficiency, availability and quality of work that many landlords would not be able to achieve on their own.”