Chiswick Business Park based Foxtons have failed in their attempt to force unhappy clients to pay their full fee as a judge agrees their service was sub-standard. The district judge ruled that agents' fees can be reduced if they do not comply with the Estate Agents Act. The ruling could open the floodgates for claims against agents who fail to act in their clients' best interests.

London house prices have doubled in the past five years, and so have agents' fees, but not always the level of service. This case, which could force agents to improve their standards or face heavy losses, was welcomed by the Royal Institution of Chartered Surveyors, claimed it was "a wake-up call" that agents could no longer bend the law without consequences.

The clients, who were taken to court by Foxtons, defended their decision not to pay the stated fee of £5,287.50 because they believed that the standard of service received fell below what the law required. The judge, after hearing their account of events, ruled in their favour and agreed to the reduced the fee to £4,000.

The Court heard that Foxtons had not produced any written confirmation of the offers made by a ‘first-time buyer’ who wished to purchase the property and that the buyer’s name was never divulged. The solicitors also had problems with the buyer’s identity, which changed several times, and eventually turned out to be an experienced investor who was buying other property in the area and not a ‘first-time buyer’ as the vendors had previously been told.

Shortly before completion when the vendors visited their flat, they were astonished to find it furnished with someone else’s belongings and a "For Sale" board from another agent outside. They contacted the agent and were told it was on the market for £34,000 more than their agreed sale price and that they had obtained the keys from Foxtons. They called Foxtons looking for an explanation and were told that everyone was out to lunch and the keys were nowhere to be found.

Upon completion, the clients conveyed their dissatisfaction to Foxtons but were informed that the company did not have a formal complaints procedure and was not a member of the Ombudsman scheme or any professional body they could complain to. They contacted Foxtons' managing director, Peter Rollings, whose response was 'The flat has been sold, what more do you want?' To add insult to injury they were called by Foxtons' lawyer and were told not to contact any Foxtons employees other than himself and were warned to pay the bill quickly.

The clients decided to only pay £4,000 of the agreed fee and offered to pay the outstanding once Foxtons explained their conduct. Their cheque was returned with a threat of court proceedings and an assertion that they had done nothing wrong – the Judge however did not agree and ruled in favour of the clients.

Peter Rollings Foxtons’ Managing Director refused to accept the ruling with good grace. He acknowledged that offers were not made in writing and that the keys should not have been handed over before completion however he added that the judgment was "outrageous".

Foxton's also recently fell foul of the Advertising Standards Watchdog for misleading claims in their promotional brochures

February 15, 2003