Can L end Letting Agency contract without penalty?

[GREIGDF]

Hi everyone, im new to letting out, bought a house with my partner and decided to rent out my flat through a letting agent in Manchester.

I decided to go with management too with the letting agent so they charged me £395 plus vat to find someone and then 10% each month plus vat.

Every 6 months however they want to charge me £395 plus vat whether the tenant signs a new contract or if it continues on a periodic basis which seems so unreasonable. I only receive after their cut on the management fee £360 per month as it is so i'm actually running at a loss.

I want to find a different letting agent or manage it myself but I can't seem to work out if I am tied in or not. I have a copy of the terms and conditions i signed and it says:

Termination of this agreement:
The landlord agrees that this agreement may be terminated by either party, giving no less than one month's written notice to the other. If this agreement terminates whilst the Property is tenanted, the Landlord will be responsible for continued compliance with the terms of the tenancy agreement and for proper termination of the tenancy agreement. The Landlord will also instruct the Agent in which deposit scheme they wish the deposit to be placed.

Having spoken to the letting agent they said i'm not allowed to leave and i would have to keep paying them the commission every 6months because they found the tenant but at the same time they keep not phoning back or answering the question as to where it says that in the contract i have signed.

I have looked in the rest of the contract and it says "a commission will apply on a renewal or extension of the tenancy after the initial term either by both parties entering into another assured short hold tenancy or by agreeing to extend the tenancy on a period ic basis payable for every sixth month term."

If i am going to give notice to the letting agent i must do so by the end of the month as the 6 months will be up at the end of september. At the same time i don't want all this to unsettle the tenant. I sent a letter to the tenants yesterday so I am hoping to hear back from them as to what to do.

Can anyone looking at what I have written work out if I can get out of this contract with the letting agent without having to pay anything to them?

Cheers everyone

[Springfields]

They want to charge you a renewal of the £365 as well as a monthly commisson?

[GREIGDF]

Yeah they want to charge £395 plus vat every 6 months. They have said i can change to a different fee structure which would be £595 plus vat for finding someone then £195 plus vat every six months.

Both sound really expensive! it's how they say i have to keep paying it as long as the tenant is there and i can't go elsewhere - the first reason was because they hold the deposit but i registered with the dps and so it can just be transferred there so now i have asked them to tell me which part of the t&c says i have to keep paying. What i put above is the only term in the section under termination of contract.

[GREIGDF]

And yeah every month they take 10% management. If i want to go to let only they said for this time i will have to pay £395 plus vat and then in 6 months i can then drop to £195 plus vat - in that case i'm better doing the £195 plus managed cos i might as well get them managin it for 4 months instead of losing it in their commission fee.

I just want to get rid of them tho and stop them taking money off me for doing nothing!

[gullarm]

Thats why I dont use letting agents.

They rob you blind for nothing.

One of my tnts is leaving as they need a bungalow, they have approached a letting agent and have so far spent £150 on credit checks. I pointed out that I didnt charge them for credit checks!

I also informed them they need to look ahead and find out what they will sting them for when the tenancy runs out and needs renewing ( even though it doesnt actually need renewing ) , re-let fee, new credit checks etc.



Im missing out on £££££££££££££££

But Im a nice landlord.

[GREIGDF]

But looking at the terms and conditions at the top do you think they havent worded it tightly enough? I think it looks like i just have to give a month and they cant charge me anything? contrary to what they tried to tell me on the phone earlier?

[Snorkerz]

I would be inclined to agree with you. I would ask the agents which terms specify this continuing fee. If they find some, and they are hidden deep in tha contract in tiny print, tell them that they are unenforceable under UTCCR and get them to refer to the OFT v Foxtons case.

Of course, if they don't find the terms, they can't charge you.

[property mongrel]

"Termination of this agreement:
The landlord agrees that this agreement may be terminated by either party, giving no less than one month's written notice to the other. If this agreement terminates whilst the Property is tenanted, the Landlord will be responsible for continued compliance with the terms of the tenancy agreement and for proper termination of the tenancy agreement. The Landlord will also instruct the Agent in which deposit scheme they wish the deposit to be placed."

There is nothing in the above paragraph, taken from your post, that suggests to me that you should keep paying the LA if you end the agreement. Is there more?

It does say that you will be repsonsible for complying with the terms and conditions of the TA, that is between you and the T. And that if you terminate the TA, you will have to do so properly.

You will also instruct the agent in which deposit scheme you want the deposit placed for protection, does this mean it is not protected at the moment and is held by the LA?

The tems are very lucrative for your agent, why did you accept them, how did other agents in the area compare?

pm

[Springfields]

If this is all you have signed in regards to your contract then all they are entitled to is the one months notice period.

Inform them that although you intend to keep the tenants in occupation you do not want them to renew the contract, you have paid for all the associated paperwork so far and require a full copy of all the tenancy information no later than the end of your contract with them (including proof that they have registered the tenants deposit in a registered scheme and compliant to the terms and conditions of that scheme).

They are fee happy and would assume if they are charging you for renewal they are also charging your tenant, in which case I cannot see your tenants becoming unsettled with the situation. Contact your tenants and make an appointment to meet them at the property, ask them to cancel the standing order they have to your agent (you can download free SO agreement from this site), this will avoid you having to chase the agent for any fees they may unfairly deduct if they do not accept that they are at fault.

Not all letting agents charge on this basis. Have a shop around and ask questions directly regarding their fees

[GREIGDF]

That was the only thing written in the section termination of agreement so i'm assuming that even though earlier on in the commission and renewal section where it says they get the fee every 6 months for a renewal or if it goes onto a periodic basis they still get the fee every 6 months that if i comply with that one term in the termination section that means they don't get anything if the tenant stays because my agreement with the LA has ceased.

I think they have the deposit placed in the TDS? I registered with the DPS so i presume I can get them to transfer it to there?

I'm worried though that if i give notice within the next few days won't they just hold the rent that my tenant pays on the 1st? Or if they do what can i do about it?

I have no contact details other than the address of the tenant. I did write a letter to them a couple of days ago but I have not heard back from them yet as I wanted to keep them informed of the situation.

Another letting agent i spoke to said they charge £400 tenant finder fee and then £99 plus vat everytime the tenant renews.

[GREIGDF]

I would be inclined to agree with you. I would ask the agents which terms specify this continuing fee. If they find some, and they are hidden deep in tha contract in tiny print, tell them that they are unenforceable under UTCCR and get them to refer to the OFT v Foxtons case.

Of course, if they don't find the terms, they can't charge you.

The only bit about this continuing fee is in the bit i put lower down on the opening post but there is no small print and there is no mention that if i end the agreement with them that it is still payable. I looked at the tenancy agreement and it mentions nothing about me paying anything to the LA for a renewal etc, it just says the tenant has to to pay £20 to the agent on renewal.

[jeffrey]

I would be inclined to agree with you. I would ask the agents which terms specify this continuing fee. If they find some, and they are hidden deep in tha contract in tiny print, tell them that they are unenforceable under UTCCR
Not quite. All terms (fair or unfair, in the defendant's view) are in principle enforceable. The claimant can sue on them. The defendant can merely ask the Court to delete terms that the Court considers unfair; and the Court will then decide whether to exercise its discretion under the 1999 Regulations.

[GREIGDF]

Not quite. All terms (fair or unfair, in the defendant's view) are in principle enforceable. The claimant can sue on them. The defendant can merely ask the Court to delete terms that the Court considers unfair; and the Court will then decide whether to exercise its discretion under the 1999 Regulations.


So do you think that they could make me pay every six months this £395 plus vat even though I have given them one months notice?

or once i had taken over the management of the letting could i then get the tenants to agree the cancellation of the tenancy and get them to sign a new one?

I've got til tuesday at the latest to decide what to do

[Springfields]

So do you think that they could make me pay every six months this £395 plus vat even though I have given them one months notice?

or once i had taken over the management of the letting could i then get the tenants to agree the cancellation of the tenancy and get them to sign a new one?

I've got til tuesday at the latest to decide what to do

No they cannot make you pay this amount every 6 months as you do not have to agree to renew the tenants contract, and they can/should not do this without your consent.

[Springfields]

Get them to arrange a property inspection for you to see the property/tenants.

[GREIGDF]

The letting agent has just phoned and said it is this that says i have to pay them:

The contract can be terminated with one month's notice received in writing from the Landlord. If the tenant occupies the property at this time, the agreed period of the contract will be charged to the Landlord.
She said that the last sentence means that they will keep the deposit until the tenant moves out and i will have to pay them until they do move out.

Yet the other bit about the termination of the agreement says (as in my first post) that if the agreement terminates whilst the Property is tenanted, the Landlord will be responsible for continued compliance with the terms of the tenancy agreement and for proper termination of the tenancy agreement. The Landlord will also instruct the Agent in which deposit scheme they wish the deposit to be placed.

I'm still confused as to where that says i can't leave them and the bit about the deposit that she just said on the phone is wrong?

[GREIGDF]

Does the "agree period" mean for as long as the tenant stays in?

The fees section says:
Upon agreeing a tenancy the commission will become payable equal to one-twelfth of the monthly rental multipliplied by each month of the term agreed in the tenancy agreement, with minimum fee of £395 plus vat. A commission of £395 plus vat will apply on every six month renewal or extension.

The tenancy agreement was for 6 months and then if nothing is signed it goes onto a periodic basis so is the periodic basis an agreed period?

I wish i had done a law degree rather than a maths degree as clearly my maths brain wasnt working when i signed up to this!

[GREIGDF]

Not quite. All terms (fair or unfair, in the defendant's view) are in principle enforceable. The claimant can sue on them. The defendant can merely ask the Court to delete terms that the Court considers unfair; and the Court will then decide whether to exercise its discretion under the 1999 Regulations.

Hi Jeffery,

I was wondering if I serve notice to my letting agent, what implications are there - can i be sued for not paying them the renewal fee every 6 months? and will they have the power to keep the tenant's deposit/the spare keys/next month's rent before it is set up to be paid to me instead?

I feel reluctant to open a can of worms without feeling that i'm not going to come of worse. It is a big letting agent i'm dealing with here and through my lack of understanding or anticipation of what might happen I don't want to come unstuck. eg if i'm going to hav to pay them every 6 months anyway, i might as well stay with them?

Thanks for your help so far,

Greig

[jeffrey]

Hi Jeffery
Who's that, then?

[jeffrey]

I was wondering if I serve notice to my letting agent, what implications are there - can i be sued for not paying them the renewal fee every 6 months? and will they have the power to keep the tenant's deposit/the spare keys/next month's rent before it is set up to be paid to me instead?
Once your contract with the Letting Agents has ended, you have no further liability to them.

[GREIGDF]

I have photographed the T&C if anyone can see clearly if they have a hold on me:

http://www.facebook.com/album.php?aid=204048&id=500599213&l=767d54c43f

Cheers

[TPRL]

Read your comments with interest. Not all letting agents are a complete rip off, honest! We are a small independent agent whose aim is to provide a first class competitive service to both tenants and landlord's. Maybe you would consider using us one day? Amanda

[jeffrey]

Welcome to LZ (but be careful not to spam!) If you do want a proper paid-for advertisement, however, Editor can arrange it.

[dominic]

The letting agent has just phoned and said it is this that says i have to pay them:

The contract can be terminated with one month's notice received in writing from the Landlord. If the tenant occupies the property at this time, the agreed period of the contract will be charged to the Landlord.
She said that the last sentence means that they will keep the deposit until the tenant moves out and i will have to pay them until they do move out.

Yet the other bit about the termination of the agreement says (as in my first post) that if the agreement terminates whilst the Property is tenanted, the Landlord will be responsible for continued compliance with the terms of the tenancy agreement and for proper termination of the tenancy agreement. The Landlord will also instruct the Agent in which deposit scheme they wish the deposit to be placed.

I'm still confused as to where that says i can't leave them and the bit about the deposit that she just said on the phone is wrong?

I am not sure why this entitles them to keep the TENANT'S deposit, as this is tenant's property, not yours.

Also I am not sure how you can charge "the period of the contract" to the LL? Or even what that means.

I would simply hand them your 1 month's notice, get shot of them, instruct your Ts to start paying you directly, and if the LA wants to kick up a fuss, allow them to try and rely on their contradictory wording.

Under the contra-proferentem rule, where there is ambiguity it will be construed against the person seeking to rely on the clause (i.e. the agent in this case).

[Tabskitten]

I have just done this

The agent said that I need to give them 3 months notice. I then asked them to send me proof of me having agreed to that, they responded by handing it back to me the same day with no fees!!