I think you are right, David - I don’t think it’s covered by the OFT ruling - as long as it’s clear in the contract, which it looks like it is.
If the landlord thinks it’s unfair, best thing is to try and negotiate, if you don’t get anywhere, complain and if that does not succeed, take it to their ombudsman. Then you will get a ruling from them and if they come down on the side of the agents, chances are a judge would to. If they don’t then, great, you are out of the contract.
It doesn’t cost much for agent to issue small claims court proceedings for monies owed and if that goes against you, you end up with a CCJ - and how sympathetic are we, as landlords, to idiots that get themselves CCJs!!!
The source of the information relating to the OFT was quoted from the content of a LL e-learning course that I have recently completed through one of the national LL associations. I also advised that the person conduct their own research to see if the case the OFT ruled on, could be used as a comparator for their own situation.
Hi be very careful with EA clauses irrespective of how unfair they appear and even if a new agent has taken over from your previous agent & then give you a shite service you are bound to the contract. I know this from experience as went to court with an awful EA franchise on this issue.
Same here.
However Foxton’s tried the same scam on me despite this. What they did was to agree to meet me at the property to inspect it prior to doing a tenant find. They did not send the contract via Email until 10 minutes before we were due to meet. What they did not expect is that in that ten minutes, I had printed out the contract, read it, spotted the outragious clauses and highlighted them. I then confronted the agent a few minutes after this and told her thart these clauses were outragious. She immediately backed down as she readily saw that she was about to lose my business and offered to remove the clauses.
I do not know whether she realised that in my eyes she had already burnt all bridges and she stood zero chance of my employing her. I never heard from her again and I would never employ Foxtons.
Many years ago Foxtons tried to charge a friend of mine £70 to change a light bulb that he did not replace before he moved out of a rental property.
I am awaiting advice from CAB, however, what the EA hasn’t factored in is that if I do end up having to pay for nothing I shall make a point of going public with their business name and it won’t bode well for their business.
They can weigh up whether it is worth the bad publicity or not.
It’s a common clause. If they were confident in their service, they wouldn’t need it, so I would avoid all agents who have it in their contract because once they have you you are stuck with them!
May be everyone should check their contracts and post on here what their termination clauses are and then landlords can avoid any with unfair termination clauses and head for those with the fairer ones.
I was with Leaders and they had the no termination clause then (I refused to sign with them unless they removed it). That was 3-4 years ago, so things may have changed since then.
Hi Adele, I’ve been an agent for 25 years (retired). The best advice on here has been Chris. This clause was/is deemed ‘Unfair & uninforceable’. The OFT has closed but its a legal requirement for agents to be regulated with the likes of ‘The Property Ombudsman’.
The best advice is to speak to a manager and then confirm everything in writing. Agents if they are on thin ice, will be reluctant to put in writing, or if they do, their knowledge maybe lacking.
Statutory law overrides contractual law, for example, you can tell a tenant in a contract to give 6 months notice but statutory law states 1 month and will beat the contract.
Just give the agent 3 months notice in writing and advise the tenant to cancel the standing order on this date, and change to you directly.
Messing about with the tenancy agreement, firstly won’t change or alter the liability clauses and could potentially go wrong, if you do not re-issue a ‘how to rent guide’ or new prescribed info, it could be deemed a new tenancy if it changes from periodic to fixed term, for example.
Lastly, agents are threatened and blackmailed monthly about ‘going public’ etc, it’s a waste of time doing this, either you are legally right or wrong. In this case, you have nothing to worry about and are correct on this point.
The Property Ombudsman is a better source of information than CAB, and they will be strict with the agent, if they are a member. Its an unenforceable clause.
I am always amazed at what agents get away with. I have always managed my own properties and am becoming increasingly concerned at council and gov moves to force us private landlords to use these middle men who are forever coming up with new and deceitful ways of extracting money out of the Landlord and tenants!
Hi Adele,
the previous Unfair Terms legislation was updated in 2015 - there’s NO WAY that I’d accept an apparently unscrupulous EA (no matter how big they my be) imprisoning you with fees, potentially for life - even more so whilst not even fulfilling their own contract with you efficiently!
Just my personal view about UNFAIR play! It does teach us to read all of the contact before signing it; in real life, you expect integrity! It’s clearly not always so!
(4)A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.
CMA guidance states the reg’ns DON’T apply “business to business”. However, it may be that a LL to EA could be a grey area? HMRC don’t accept that LL’s are “trading” businesses (but Investors instead) - hence not requiring lower scale LL’s to pay NI. You’re paying them for their ‘skills/knowledge’, not to be ripped off.
Good Luck with it all!
The key question is whether the OFT/CMA made any rulings on this specific issue. If so, the a judge may be swayed by the argument, but if not then @Adele4 would have to bring a case to court at her own risk, which I would not recommend. A decent housing solicitor should be able to advise on this.
If you appeal the contract and unfair it would like be under the The Unfair Terms in Consumer Contracts Regulations 1999. A judge would make a judgement as to whether the particular terms in your contract were unfair.
In general judges don’t like eternal contracts with no provision to end it or finite withdrawal compensation. But its down to the court so if you go this route i would show your contract to a property lawyer first and ask advice.
However you also mention the agent has not “done a particularly good job”
In what ways is this so - have they been late passing on rent or been a obstacle to efficient tenant landlord communications? Or are there other ways they have failed to deliver their side of the contract.
If so this would also be strong ground to terminate the contract without penalty - as they have have not delivered their part of it.
However if it is just that you regret the arrangement then you should consider the agent is owed some compensation for early termination of the contract .
A sensible course would be speak to the agent and tell them you have been advised that under the The Unfair Terms in Consumer Contracts Regulations 1999 such a clause with now way to terminate it without indeterminate ongoing fees would be considered unfair by the court - and offer to negotiate a fee to terminate the contract by mutual agreement to end the arrangement with good will and avoid the inconvenience and expenses of legal action for you both… Personally i would offer something a cash settlement equal to what they would have received from as their percentage of between 3 and 6 months rent. They get the regardless of whether the tenant leaves immediately or stops paying rent .
If they accept this all well and good - if not go see a property lawyer and ask them to find a way to release your from the contract.
But in the future be very wary of signing any contract unread with an agent contractor or anyone else - and if it is provided to you late do not sign it until you have had time to take it home, read it, and ensure you understand and accept it all. If you are unsure about anything ask them for written clarification…
@Terry6 Im aware of the Foxtons case which has already been referred to earlier in this thread, but I dont believe the ruling covers this circumstance. The case was about renewal commission, third party commission and sales commission, but not early termination of contract penalties.
Im not a legal but I do know contracts have to be reasonable in the eyes of the law. As recommended above speak to the manager. if they are holding your money it is up to you to get it back. that would mean a small claims court if you can’t reach an agreement. if you have the money then they have to pursue you and are more likely to settle. if you have the money I would let them chase you until they either go to court or acquiesce. oh keep a note of their shortcomings it is relevant as to why you terminated
Every agent has to be a member of a redress scheme. I would try them first. You would probably have to go through their redress scheme before going to court anyway. I think🤔