London estate agent Foxtons has been sent a “letter of claim” by a law firm acting for a group of landlords who say the agent has been overcharging landlords for work.
The claim concerns 55 landlords and could potentially run into millions of pounds.
The claim includes accusations that Foxtons has been charging landlords commissions of as much as 33% of a contractor’s fee for work done on their properties, without landlords’ fully informed consent.
These include repairs, maintenance, electrical safety checks, cleaning, and inventory checks without obtaining the fully informed consent of landlords.
It is also alleged that the London based estate agent has engaged contractors who charge above the market rate in breach of its duty to try to get a good deal for landlords.
Foxtons is also accused of charging tenants various fees that Foxtons did not tell landlords about.
The individual claims on behalf of private individual landlords who have used Foxtons let their property range in value from £4,000 up to tens of thousands. All landlords who have used Foxtons potentially have a claim.
One of the claimants is Dr Chris Townley, a lecturer in competition law at King’s College London, who previously worked as a principal case officer at the Office of Fair Trading who said he felt ‘betrayed’ when he found out that Foxtons had taken commissions from anyone working on his property without his consent.
Chris Haan, from the consumer team at Leigh Day, said: “We were not surprised when many other landlords came forwards with similar claims to that of Dr Townley.
“This is the first group of claims to be put to Foxtons but we believe there will be many more. We consider Foxtons has a potential conflict of interest in that the more expensive the contractor is, the more Foxtons makes in 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.
“We are taking this case on no win no fee with the aim of securing a refund from Foxtons for all affected landlords.”