Is an unsigned agency contract enforceable?

[Landlord Kev]

Is an unsigned and contested agency contract still enforcable if the agency has done work with the landlord?

We are the landlord with 10 student letted hourses. After leaving one poor agency (giving him the required 3 months) we found another who would take out houses on.

We saw, but did not sign an agency contract. We took it away to look at and continued to start dealing with them. The houses had phased release from the old agent so not all together.

The agency agreed to work with us to resolve the queries we had about the contract and return the updated contracts to us for signing.

We have had solicitors advice to say that the length of service was not good (12 months intial with 3 months release) plus several other minor problems.

We emailed to say that we needed to discuss the changes as well as leave a copy of the solicitors comments.

After waiting several months nothing was done about it.

We then had do a lot of work that the agents should have and started to realise that it would be much better to do it ourselves as we had virtually had to do that anyway to obtain tenants and ensure they were looked after properly.

As it stands now we are 7 months into the contract but still no signed contracts for any of the houses.

Could we leave now or are we liable to go to the end of our 12 months, as, while we did not sign the contracts, and queried them, we still did continue to use their service (they have received all payments due).

[Bel]

I would suggest that it would be easy to walk away from this contract right away because of the fuzzyness of it all

but ethically I would only walk away once I had given whatever notice that would have been acceptable had the contracts been approved and signed and served the fixed term that would have been agreed upon.

If the agency is at fault in its management of your property, that would be another reason to leave immediately

My opinion only

[Paul_f]

You have agreed that written terms were sent to you but unsigned, but the agent could argue that you were furnished with them and you proceeded to deal with the agent.

There is no lawful requirement to have written terms but it would be a requirement if the agent is regulated via ARLA/NAEA/RICs for example.

[Lawcruncher]

The agent has been managing the property and so you clearly had an "agreement" with them. The position is complicated by the fact that certain terms of the written agreement produced were in dispute from the beginning. I tentatively suggest that the terms of the agreement you actually have are the terms of the written agreement with the disputed terms removed.

[Landlord Kev]

Hi there,
many thanks for your replies, it really helps.

I actually like the agents personally, but have slowly had to take over what they were supposed to do as the service was poor in many areas.

I think that the main basis for me wanting to do it all is that the tenants, almost to a person, have all complained about the agents in a number of different areas and have almost pleaded with me to continue to take over the services as they just did not want to deal with them.

I really care about my student tenants and try to give them a typical customer experience that you find in the hospitality business, which is what buiness we student landlords are in really. After all, they are paying for a service, and it is no good making them wait 10 days to get hot water fixed, or 4 weeks to sort out the broadband that they have paid for etc etc.

I appreciate that we are bound by certain terms of the contract as we had carried on using their services. The length of the contract (and thus how much commission has to be paid) is the main point at issue and we did ask for discussion on changing this point.

The issue of service itself seems to be a different matter that would have to be sorted seperately if the contract was proven to be all valid.

I think I will try to have a good chat to the manager and try to get a setllement that will keep us both relatively happy. After discussions, there have been attempts to improve the service but without any major changes to the business these initiatives seem die in a couple of weeks.

I am new to this game and do notice amongst the agents for students that there is a bit of an ethos that since they are students, nothing is urgent and good service is not required, almost laughed at.

Students are now starting to see it differently from the past poor service days (young one style!).
This seems to be because they are not getting grants, so they treat the money like theirs (as they have to pay it back) so are being more demanding.

Anyway, many thanks for the advice, it did confirm what I had thought.
Kevin

[agent46]

You have agreed that written terms were sent to you but unsigned, but the agent could argue that you were furnished with them and you proceeded to deal with the agent..

That is known as "acceptance by conduct" and would make the contract enforceable.


There is no lawful requirement to have written terms but it would be a requirement if the agent is regulated via ARLA/NAEA/RICs for example.

Not quite. The fact that the agency breached a professional code of practice would not affect the enforceability of the contract. Moreover, IIRC, it is only a legal requirement for an agency to have written and signed terms of engagement when acting in connection with the sale of a freehold or long leasehold estate (from memory, the Estate Agents Act 1979 s.18). However, again, even if that section applied to this set of facts (which it doesn't, because this is a letting) that would be a matter for the local Trading Standards Dept to pursue with the agency and would not affect the enforceability of the agency contract between LL and LA.

[Paul_f]

Not quite. The fact that the agency breached a professional code of practice would not affect the enforceability of the contract. Moreover, IIRC, it is only a legal requirement for an agency to have written and signed terms of engagement when acting in connection with the sale of a freehold or long leasehold estate (from memory, the Estate Agents Act 1979 s.18). However, again, even if that section applied to this set of facts (which it doesn't, because this is a letting) that would be a matter for the local Trading Standards Dept to pursue with the agency and would not affect the enforceability of the agency contract between LL and LA.The information in this message was nothing to do with enforcing the contract merely the requirement to have written terms if a regulated agent, which is all I said.

[agent46]

The information in this message was nothing to do with enforcing the contract merely the requirement to have written terms if a regulated agent, which is all I said.


But it is not a lawful requirement, which the grammar of your last sentence in post #3 seemed to suggest.

The requirement for written letting terms is merely the internal rule of 1 professional and 2 quasi-professional bodies. I doubt very much that OP will be all that concerned with the internal discipline to which the agent might be subject as a result of their puported breach. Oh dear, the agent might get warned or even banned by the NAEA - how terrifying for him!

[Landlord Kev]

If "acceptance by conduct" is applicable what is the point of signing contracts?
Also a representative of the agents said they would make changes and get the contracts back to us but did not. What do we do then? Say we will not deal with them again, and thus breach our contract?
Catch 22.

It does seem like as long as they wave the contract in our general diretion once we start trading with them we are stuck with them for the length of the contract. Even if the service is poor and costs us time and money we cannot claim that as reason to shorten the contract?

Does this need to be sorted out later? For example take them to small claims for the money that we had to pay to do the work they should have?

It does seem that in the industry the agents have all the cards. Once they start the service (and thus their contract) you are stuck with them come what may, bad service or good, untill the end of that contract.

Waring to other landlords. Make sure you have a copy of the things you would like in the contract and sit down with the agent and compare them and say that terms you want in. Do not start deaing with them until you do this.

I bet that they will not want to make the changes (costs money and they LIKE the terms they have written!) so I suggest you have a solicitor on short notice to make the changes to take back to them. If they want your service and thsu money, they will have to deal on your terms not theirs.

Terms to include would be short service, all rents paid into your account daily or weekly, bond in your account not the agents, all utilities and council tax in your name not the agent etc etc.

Again thanks for your posts,
Kevin

[agent46]

If "acceptance by conduct" is applicable what is the point of signing contracts?


The point of signing contracts is that it prevents disputes like this one.

[Lawcruncher]

The point of signing contracts is that it prevents disputes like this one.

And of course there has to be a fall back position. You are in an intermediate position where it is clear there is a contract, but not what its precise terms are.

Whatever the terms are, an agent's job is to manage. If he is not managing he is not doing his job. You would have a remedy even if you had signed up for a fixed period.

[Esio Trot]

Is an unsigned and contested agency contract still enforceable if the agency has done work with the landlord?

A number of agents round our way, in order to increase their portfolio quickly, use the "assumptive" process.

You walk in to their office (or they meet you at the property) to talk about renting it out. They get your name, address, the property details and a key.

Within a day or so you get a letter in the post, "Thank you for instructing us, please find our terms of business."

[agent46]

And of course there has to be a fall back position. You are in an intermediate position where it is clear there is a contract, but not what its precise terms are.

.

Which is exactly how disputes come about. In the absence of a written agreement, one party says "We agreed a,b,c" but the other party says, "No, we agreed x,y,z", and the courts have to sort out the mess.

[jeffrey]

A number of agents round our way, in order to increase their portfolio quickly, use the "assumptive" process.

You walk in to their office (or they meet you at the property) to talk about renting it out. They get your name, address, the property details and a key.

Within a day or so you get a letter in the post, "Thank you for instructing us, please find our terms of business."
So how does Agent prove acceptance by client sufficient to prove terms of a contract? "Assuming" wouldn't stand up in Court!