As a landlord with many years of experience, I agreed to fully manage a couple of a friend’s flats. He is doing that trhough his registered charity.
My friend had entered an agreement with an estate agent ten years ago- this was for a tenant finding and rent-collection service only.
Since then, there have been a number of tenants in those flats; one of them being a long-term tenant of 10 years.
The estate agent convinced my friend to accept a slightly below market rent with three-year ASTs, as the flats were not in pristine condition.
We established that the estate agent neglected to carry out the Right to Rent checks and didn’t send the ‘How to rent guide’ to all tenants and it took the estate agent over a month to send us copies of ASTs and deposit registration information.
The issue now is that the original T&Cs clearly state that the estate agent will receive commission for as long as “their” tenant remains in the property.
While this is a common contractual term, it seems very unfair and I believe that as a consumer, my friend would be able to challenge such an open-ended contract and pay a termination or “tenant finder” fee to cancel the agreement.
As a charity/business, things are not quite as simple.
However, given the estate agent’s lack of duty of care, the idea is to confront them with “material breach” (failure to perform their basic obligations) and offer to pay a settlement fee of a month’s rent per tenant to cancel the contract.
When we contacted them initially, they were not willing to negotiate a handover of tenants under any circumstances.
Has anyone had any experience with such seemingly unfair contract clauses?
Has anyone had any experience with reporting estate agents to the Property Ombudsman?
Your friend has to start by making a formal complaint to the agent in writing and stating that as a result they no longer have confidence in the agency’s management and they wish to end the contract without penalty. If the agent doesn’t agree, they would escalate this complaint to whichever redress scheme the agent belongs to.
I’m not sure what connection your friend has to a registered charity or how the property letting could be a charitable activity?
If you wish to perform the letting agent duties you mention, then you will need to join a redress scheme yourself, buy appropriate insurance and open a protected client money account.
Thank you both for your helpful replies.
The poperties belong to the charity and the income funds their charitable activities.
I was aware of the redress scheme but at this stage I am not charging anything and am doing this as part of the charity as a volunteer rather than as an external company or individual offering this as a professional service.
It really is a case of bringing this service “inhouse”.
Has anyone had any experience challenging a lettings agent’s open-ended lettings agreement which says that comission is payable for the entire duration of “their” tenants?
Has this cbeen challanged in court or are people just putting up with it and wait until the tenant moves out?
You would still need to be part of a Client Money Protection scheme and should still have appropriate insurance. If you make an expensive mistake, the trustees would have a duty to sue you.
The clause you mention is pretty standard and is probably enforceable. The Foxtons case may not be relevant but is worth looking up.
Fees in perpetuity maybe/are in breach of the consumer trading act 2015
Tessa has recently published a newsletter regarding a issues with estate agents , which I’m sorry I think I deleted after reading
The oft were successful against foxtons back in 2009 for a similar case
You should bring it to the attention of trading standards at your local authority and see what advice you are given