We served 2mths notice to leave our 3yr AST agreement (with no break clause) at the end of January 2025 (17mths early). We are grateful that the landlord agreed to find new tenants, rather than making us pay rent until the end of the fixed term. The agent’s response confirmed the potential rent and commission liabilities, quoting a section from our AST agreement, which stated our charges, including:
“an amount equal to any pro-rata commission fees that have been incurred by the Landlord for the unexpired portion of the Tenancy, if the Tenancy is terminated during the Fixed Term”.
As it is in our contract, we were prepared for this - it amounts to just under £3000, for the 17mths remaining of the Fixed Term.
New tenants have now been found by the agent and will move in as we leave, so fortunately there will be no charges for loss of rent.
The landlord will be charged a second commission fee by the agent, for this new tenancy. However, DESPITE THIS, the rent for the new tenants is to be £200 more than our rent has been, so even if he does not recover the remainder of our commission fee from us, he will be around £250 better off than if we had remained until the end of our Fixed Term.
The Tenant Fees Act 2019 states that costs charged for early termination must not exceed the loss incurred by the landlord. There will be no loss to the landlord - instead he will gain, so is it in breach of the Act for us to told to pay the commission, even thought it’s written in our AST agreement that we should pay for requesting early termination?
We think he may choose to pay the agent’s fee for full management for the new tenancy, rather than just the letting fee. If this is the case, he would make a loss, but it would still not be as much as the 17mths commission we have been told we must pay. If this is the case, should we pay only the amount of the loss, rather than the full 17mths commission?