I want to end my contract with the letting agency but keep the tenant they introduced.
After Year 1 the agent said we had to renew and make a new AST because we were in a 3 year contract with them. We are now coming to the end of the 3rd AST. We want to keep the tenant and roll them on to a periodic tenancy because a new AST created now will soon be invalid anyway due to the Renters R Bill. The Agent’s T&Cs state:
"The commissions detailed in the Lettings Service Options are payable by the Landlord to the Agent following the introduction of a Tenant…for as long as the Tenant remains in occupation. "
Does this continue to apply after Year 3, even if we go into a periodic tenancy? Ie are we stuck with the agent for as long as we keep the tenant (could be years and years) and would this be at the Year 3 percentage rate?
Once the RR Bill comes into force, what if we want to self manage the tenancy, without the agent? The agent will try to enforce commision payment based on the above clause but the RR Bill will not allow us to evict the tenant and replace with a new tenant unrelated to the agency which we find ourselves in order to self manage.
What to do at this point? The AST is up for renewal in 2 months 1 week (May). The tenant has said they want to stay. I am loathe to lose a tenant just in order to get rid of an agency while I can still use Section 21 but equally do not want to be tied in ad infinitum to the agent. If difficult now, it will be impossible under the new legislation.
There is case precedent for clauses in perpetuity and it’s in your favour
They can’t go beyond three years
They only renew AST so they can charge you for rewriting a contract. It’s not necessary to renew an AST, especially now the RRB will override your AST anyway
I would speak to trading standards or a specialist solicitor
OFT vs Foxtons limits fees to three years . I think they are breaching case law
Don’t renew AST because when RRB comes in they will want money to swap contract etc etc
Let the AST run into a periodic and do not pay any more fees
Tell them to take you to court if they want fees in perpetuity and see what happens
Like anything knowledge is power . I would call their bluff. They signed a contract but it does not mean it will stand up in court as it breaches CTA 2015
So I contacted Citizens Rights and they were useless.
I spoke to the NRLA and they mentioned the Foxtons case too but basically said I would need to check with a solicitor.
Where do I go from here? I need someone to look at the documents that were specifically given to me and check where I stand and walk me through this step by step.
Nobody seems to know what will happen about previous landlord contracts with lettings agents once RRB comes into force.
What about the deposit? It is held under the Agent’s account in the Deposit Protection Scheme. DPS told me even if I set up an account with them, only the Agent can ask them to transfer the deposit to my name.
If I let it run into periodic, what will happen to the deposit?
Can the Agent force me to pay fees even if it runs into a periodic? They were not charging me a fee to draw up a renewed AST per se. They are charging me a %commision for introducing a tenant who remains in occupation. So theoretically, they can continue that even if we don’t draw up any new contracts.
David Smith of jMW knows about this case law, as I heard him reference it in his webinar ,and can help but it will cost you
You need to speak to the n r l a department that takes in cases on behalf of landlords
Call them back and ask which department do you speak to to get the same support that they gave to Broadley in Broadly vs Leeds
This has a greater impact for all landlords and thus they may take on your costs as they did for Broadley
You may want to email their contact department
Don’t give up at the first hurdle try try and try again
I doubt the N R L A would take that on as it will likely be irrelevant in a few months. Once the RRB becomes law, there will be no fixed term tenancies and agents will have to come up with a different charging model.
I also did this because my agent was charging 20% but contacting me with minor problems I had to sorted myself, it was relatively straight forward but the agent wanted 3 months commission to end the contract. but going forward I received a 20% rent increase with the tenants not having pay an increase.
Regarding deposit it was relatively easy to transfer to a deposit protection scheme in my name, nothing changed for the tenants except rent was paid direct to my bank. I explain to the tenants what was happening even my extra 20% costing them nothing. Also the tenants are happy to speak to me directly instead of the agent.
I’m in the exact same position as you, Earthling. I thought i would use agents to manage tenancies as i have a full time job and couldn’t deal with day to day issues. I hadn’t realized that tenants do not contact you or the agent all that often.
I had two tenancies for two properties being managed by letting agents. The agents said if i wanted to keep the same tenants i’d have to continue paying the letting agents for good as they found the tenants. I managed to get around one of the tenancies by asking the tenants to say to the agents they were moving out. I then pretended to do an end of tenancy check out which i handed to the agents so that they would pay the tenants the deposit back. The same tenants are still at the property and there is no contact with the letting agent. Can you do something similar? Or even ask the tenants to move out temporarily, place their furniture in storage for a few days and allow the agent to end the tenancy? Its a lot of hassle and will cost for new temporary accommodation and storage fees but it will save you hundreds even thousands in the long term.
Unless the agent finds out (and they usually know their patch very well) and then you find it costs you hundreds or even thousands in defending a fraud case.
… which information is clearly legible in the contract you signed when you appointed the agents.
The key here is do NOT get an agent to manage. Get them for introduction ONLY . That is what I do. If you must have them manage then make sure you are NOT tied in as long as the tenant lives there, in case you change your mind. If they will not remove that clause then go elsewhere
Exactly what I did with the last agents I used when I was overseas (so had no choice). I shopped around three or four local chains and one eventually agreed to remove this clause. They got 5 years of income out of over multiple properties until we eventually returned and took them over with no strings attached. Win win.
Here is the opposite take. The agent has done the job you instructed him to do on terms agreed. He had provided an excellent tenant in return for a percentage of the rent received. Why are you now trying to wriggle out of the agreement?
If a LL circumstances change and they want to manage it why should they pay for a service they no longer require , and that in perpetuity?!
Your point is you go to Tesco and buy meat every week. Then you decide to go vegan . Would you still pay Tesco for your weekly meat bill if they demanded it ?
No you would go to another store
Whatever happened to consumer rights ?
I went to a letting agent years ago who wanted 10% to manage even though I was let only . I walked away.
You don’t give people money for nothing . What kind of business model is that ? Some of their tenants are coming to me next year and I’ve seen how awful they are at managing the house . If they are treating the LL badly it speaks volumes as to the service they are not going to give the tenant !!
Looks like a judge has already ruled against Foxtons for clauses in perpetuity
Need I say more ?
