The Office of Fair Trading (OFT) has obtained a final High Court order which prevents Foxtons Ltd from using specific terms in its letting agreements with consumer landlords and relate to sales and commissions.

The High Court ruled that Foxtons’ renewal commission terms were not transparent enough to consumers, and represented a trap and were therefore unfair. It ordered that Foxtons may not rely on these terms except where they remain instructed to manage the property.

Ian Potter, operations manager of Association of Residential Letting Agents (ARLA), said: "We expect all ARLA members to abide by a Code of Practice, which binds them to ensure that all fees and charges are made clear. In addition, we expect the Governments proposals for the regulation of agents to further augment our work in this area.

"The letting of a residential property is, by its nature, a complex transaction centred on the emotive subject of peoples homes. Hence it is vital that agents maintain clear and transparent communications with consumers throughout the process. We would encourage landlords and tenants to only choose ARLA members, who are subject to a consumer complaint scheme if the code is proved to have been broken."

The Order also declared that the following terms are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords.

Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation.

Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant.

Foxtons has subsequently had to make significant changes to its standard contract with landlords as a result, including making the liability to pay renewal commission more transparent, reducing the commission payable on renewal, and limiting it to two renewals.

Jason Freeman, legal director of OFTs Consumer Group, said: “We welcome the finality brought by this Order, and the courts declaration that the terms we challenged are indeed unfair.

“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 peoples attention. Consumers should not be presented with a surprise bill for services they have not consciously agreed to.”

The OFT will continue to monitor whether this contract operates fairly under the UTCCRs.