Foxtons, the estate agency, today lost a High Court case when a judge ruled that some of the terms and conditions it imposes on landlords are unclear and unfair.

The Office of Fair Trading (OFT) took the property company to court over terms that force landlords to continue paying commission even if Foxtons is no longer involved in letting or managing a property.

The estate agent, founded by Jon Hunt with a single branch in Notting Hill in 1981, has previously said its terms were fair and the OFT court case was “fundamentally misconceived”.

But this morning, Mr Justice Mann said that charging repeat renewal commission was a “trap”’ or a “timebomb” for consumers.

The judge added that such important terms must be flagged prominently not just in the contract, but also in any sales literature. He said a typical consumer would be unlikely to read standard terms with a great degree of attention and would not expect important obligations to be tucked away in the small print and not specifically brought to their attention.

The OFT said it would now ask the court to force Foxtons to remove the unfair terms and conditions if the agent did not do it voluntarily.

The competition watchdog, which brought its case after receiving numerous complaints against Foxtons, believes the practices are “widespread” in the industry and plans to pursue other agents if they do not comply.

Foxtons, which has already made some changes to its contracts, said that it welcomed the judgment which does not state that automatic renewal commissions are always unfair but rather that they can be in certain circumstances.

The National Landlords Association (NLA), a representative body for private residential landlords, welcomed a ruling that it said will see an end to unfair renewal fees for landlords where the letting agent has done nothing to earn the fee.

The NLA said many landlords were paying thousands of pounds in "totally unwarranted" commission.

Mr Hunt received more than £300 million when he sold Foxtons to BC Partners, a private equity firm, for £360 million before the credit crunch took hold. BC Partners has since conceded that the acquisition was a mistake and Foxtons has breached its banking covenants

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