Advice on Letting Agents

[Stroller]

I have had a good tenant in the flat that I let for the past year. At the moment, the flat is managed through letting agents. However, I am beginning to think that I could manage the let on my own. On checking through the Terms of Business of my Letting Agents, I read that even if I terminate my contract with the Agent "fees remain due on any tenancy until the tenant vacates the property". Is this normal practice, and what, if anything, can I do about this?

Thank You!

[Paul_f]

Always a difficult one this, but there has to be a cancellation clause within a Terms of Business otherwise the contract couldn't officially end. It also has to be reasonable and therefore anthing more than the the period of notice that you would otherwise have to serve on the tenant to terminate the tenancy i.e. two months is probably excessive.

One word of caution though is that if the agent is a good one, and a member of ARLA/NAEA then you might not be doing the right thing to dispense with their services.

If you insist however, the answer is to serve the tenant with a S.21 Notice (dependent upon where you are in the tenancy term - but it appears it is now periodic) and invite him to apply to you directly if he/she wants another one. Hey presto! You can the cancel the agency terms. Beware that you don't serve the S.21 Notice and then offer the tenant a new tenancy as it will be invalid - he must request a new tenancy after the service of the notice.

[Stroller]

Thank you very much Paul, for your very informative reply. The AST agreement with my tenant is just about to expire. With regard to the scenario that we have been discussing, is it best to isssue a new agreement for a year (with an immediate break clause), or just carry on with the present agreement on a Periodic basis? I have been told that there is absolutely no legal difference between the two, apart from the tenant only has to give one month's notice. Obviously the latter will save me about £60 or so, but what is best if I want to keep the tenant?

Also, you say that if the agents are good ones, and a member of ARLA/NAEA, it might not be a good thing to dispense with their services.
Is this because I might not be able to use them again in the future? What other implications are there?

Thank You

[Stroller]

Further to my recent posting, I also want to raise the rent on the property. What implications does this have as regard a Periodic or Fixed Period AST?

Thank You

[mjpl]

Be prepared for legal action if you try the section 21 notice approach. Any agent with correctly drawn up terms of business will be charging you for the introduction of the tenant to the property. An individual term is academic.

If your agent is managing their termination clause probably only allows you to terminate the rent collection and fully managed portion. These are monthly payments for a service that you can terminate. However, the introduction charge quite often does not terminate until such time as the tenant phsically vacates the property and does not move back in.

The OFT is unhappy with these charges and is pushing for an end to repeat intriduction fees, but in the meantime your agent may consider a case against you.

If you agent does pursue you I suggest you warn them off with OFT action and see what happens. Alternatively approach your agent and ask them why they feel they can charge when the OFT says they cannot. It may also be prudent to let them know that a numebr of agents have lost these cases.

Good luck

[mjpl]

To raise rent during a periodic tenancy you need to serve a section 13 notice. If you do not, monies can be reclaimed.

[Paul_f]

I can't agree with some of this!


Be prepared for legal action if you try the section 21 notice approach. Any agent with correctly drawn up terms of business will be charging you for the introduction of the tenant to the property. An individual term is academic. Not true! If it doesn't follow the UTCCR guidelines then it almost certainly would be an unfair term.

If your agent is managing their termination clause probably only allows you to terminate the rent collection and fully managed portion. These are monthly payments for a service that you can terminate. However, the introduction charge quite often does not terminate until such time as the tenant phsically vacates the property and does not move back in. This is not right! There HAS to be a termination clause and it must be unconditional! You can't have an agreement half terminate! It's either in force or not!

The OFT is unhappy with these charges and is pushing for an end to repeat intriduction fees, but in the meantime your agent may consider a case against you.

If you agent does pursue you I suggest you warn them off with OFT action and see what happens. Alternatively approach your agent and ask them why they feel they can charge when the OFT says they cannot. It may also be prudent to let them know that a numebr of agents have lost these cases.

Good luck

[Paul_f]

To raise rent during a periodic tenancy you need to serve a section 13 notice. If you do not, monies can be reclaimed.
You have to go the S.13 route ONLY if there's no clause in the AST to state how and when any rent increase might occur. Otherwise you would just implement the clause, but it shouldn't be more often than an annual increase to be fair. The tenant is still able to appeal to the Rent Assessment Committee in any event of a proposed increase within the first 6 months of such increase even if you don't have to use the S.13 route.

Another way round implementing an increase is to serve a S.21 to terminate the tenancy and then if the tenant requests a further term you can offer it to him at an increased rent which he is quite at liberty to decline and move out!

[mjpl]

I am incorrect. For some reason I thought the term had lapased or would lapse onto a periodic in which case a section 13 notice is required. Of course any fixed term renewal or new tenancy can be amended.

[mjpl]

If you read my first post you will note it is in two sections. One describes what agents contracts include and what they are likely to do and the next describes the changes afoot. I think Paul has misread this.

If you look through all of my posts you will note that I always council caution when considering new laws. It takes a long time for these to filter through to the consciousness of all JPs.

Paul may be correct about the new changes but we won a legal dispute just weeks ago and had our introduction fees awarded to us for a renewal term by pointing out that our charge is for the tenant themselves and not for the term they have agreed with the Landlord. As for the clause allowing absolute termination of an agreement, it is there for all to see. It's called a section 21 notice. Once the tenants are out (permanently) our contract is terminated unconditionally.