My complaint against my landlords is ….

by Readers Question

11:16 AM, 22nd March 2015
About 6 years ago

My complaint against my landlords is ….

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My complaint against my landlords is ….

So glad there is a platform for tenant support – I feel really screwed! My complaint against my landlords is ....

So my partner and I have been living in a property for just under one year. When we originally looked and moved into the property, WE requested two years as we wanted to keep the high London costs to a minimum for the two years we expected to live at the property.

However, I have been made redundant 9.5 months into our tenancy, and can no longer afford the rent in London, and my partner and I have decided to move out of London.

We have the landlord 9 weeks notice, stating we would like to leave on May 16th, (one year after starting the tenancy and one years early termination).

Our landlord has agreed to this and is happy to find new tenant.

HERE IS THE PROBLEM

He has stated that on starting the agreement, our landlord paid the letting agency the value of 7% of 24 months rent (what I believe is a finders fee).

As we are ending the tenancy early, he has said we have to pay that remaining fee! Approximately £1300!!!

I understand that if we end the tenancy early we have to pay until the agreement ends (or as soon as other tenants are allocated) but I don’t see why we have to pay HIS fees?!

Can you let me know if we do have to pay this!?

Thanks

Lewis Fountain

Comments

Tony Atkins

6:53 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Steve From Leicester" at "23/03/2015 - 14:28":

Steve, I was using the example of a contract where there is a break clause. It seems to me deeply unfair when a letting agent bills the landlord on a percentage basis assuming that the 12-month tenancy will run its full term, but that tenancy agreement is then ended by the tenant using the agreed break clause. In such cases the agent should not receive their full 12-month fee: he or she should only receive the percentage of the rent actually received. The letting agent has provided the landlord with a vouched-for credit-referenced tenant for a certain time period; if the tenant then chooses to break the contract, the letting agent should expect to lose out just as much as the landlord does; he or she should certainly not then expect to bill the landlord all over again to find a new tenant after the old one moves out, effectively being paid twice for the same time period.

It's too simple to say that the landlord should have refused to accept the percentage arrangement or the break clause: often there is no alternative as all letting agents have the same policies and no other suitable tenant is available. I myself very rarely use letting agents because I've experienced too many examples of poor service and sharp practice with fees, but if I had to use one, I would expect to pay a fixed fee for tenant-finding and actual work done, with no follow-on charges if the tenant stays on after the original contract ends, but equally no refund if the tenant leaves early: that's between the landlord and the tenant. It's the percentage fee that I object to most, as it bears little relation to actual work done and has a time variable which is not refunded if the tenant leaves early.

Mark Alexander

7:35 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Tony Atkins" at "24/03/2015 - 06:53":

Hi Tony

I agree with most of what you have said but I would like to pick up on your point regarding percentage fees. I will use my letting agent, LettingSupermarket.com as an example to make my point. They charge 4% of rent + VAT for full management subject to a minimum of £24.99 pcm + VAT, 12 month minimum term and no extra charge for tenant find.

Let's assume two identical properties, one in Shropshire the other in London. The one in Shorpshire attracts a rent of £550 pcm so the minimum fees apply. However, the one in London rents for £1,200 pcm so the 4% fee works out to £48 pcm + VAT.

In London the cost of organising a full inventory by an APIP or AIIC inventory clerk is much more expensive, hence the percentage fee is applicable.

Similarly, if the property is a 6 bed farmhouse in Shropshire and rents for £1,200 pcm then the cost of doing the inventory and the potential maintenance issues associated with that property are also significantly higher than they would be for a two bed flat.

The more affluent the area, the greater the rents will be and this will need to match both the workload and the wages economics of that area.

Given that much of the work is done up front I do thank a certain tie in period is justifiable, but I think this should not be more than one year and certainly never longer than the AST if the term of that is a year or more. If all agents were to work on that basis it would provide for much greater transparency.

Finally, I have no idea what Joe Bloggs was going on about, I think he must have got out of the wrong side of the bed yesterday! LOL
.

Anthony Endsor

8:39 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Joe Bloggs" at "23/03/2015 - 23:39":

Joe, what 'landlords stupidity' are we talking about here???

I can't see that the landlord would have any option other than to pay the letting agents fees, however unreasonable they may seem.
You say the landlord will benefit from the tenant leaving early as the new rent to an incoming tenant will undoubtedly be higher. rents don't change that much over the course of one single year. I doubt the new rent will be much if any higher than the previous one, and then there's the void period. What about that? Who pays the mortgage during that time?

As far as I can see the landlord isn't ripping anybody off. He is the victim of yet another tenant taking advantage of the system being in the tenants' favour.

Joe Bloggs

9:03 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Anthony Endsor" at "24/03/2015 - 08:39":

anthony,

the absolute stupidity of agreeing a finders fee based on 2 years rent. no sensible landlord would agree to that.

as for the remainder i suspect you are not a london landlord. we havent had a void for years as tenants move in next day or even same day and rents have gone up considerably.

Joe Bloggs

9:06 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Mark Alexander" at "24/03/2015 - 07:35":

hi mark,

not sure what you are going on about as you are also making the point that the fee should not be based on 2 years projected rent! i.e.:
'...but I think this should not be more than one year...'

Simples.

Mark Alexander

9:17 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Joe Bloggs" at "24/03/2015 - 09:06":

Joe

Landlord, tenant and letting agent all had an agreement that they were happy with at the time and signed a contract on that basis.

Tenant now wants to get out of that deal so why shouldn't he pay a penalty for that.

If you sign up for a 2 year fixed rate mortgage and then a year later you want to get out of it because your circumstances have changed or because you've been offered a better deal will the lender waive the early repayment charges? No, of course not! Not even if the rates have since gone up and the lender can lend the same money at a higher rate. So if that's what mortgage lenders do, why shouldn't landlords.

You seem to be missing the real point here in my opinion. Tenant negotiated on a deal to fix his rent for two years. He now wants out. Landlord is perfectly within his rights to hold him to the contract he entered into. Landlord is offering a generous get out to tenant and tenant is looking a gift horse in the mouth.
.

Joe Bloggs

9:39 AM, 24th March 2015
About 6 years ago

hi mark

you are misunderstanding what im saying.

what im querying is the basis for calculating the LL compo.

would you have agreed a finders fee based on 2 years projected rent? this is even more ridiculous when you consider the property is in london where demand is sky high.

Lew Hfa

9:48 AM, 24th March 2015
About 6 years ago

Thanks for all your comments and ideas - it's greatly appreciated (this was my question).

I entirely agree all round; and understand the frustration particularly coming from the landlords side of things regarding losing money, but surely paying a two years finders fee on commencement of the agreement is just backwards for the landlord and rubbish for the tenant if they choose to leave early?

I am in the position where I'm having to pay the £1350 finders fee remainder for the year, the property is being re-let, and if the agency finds new tenants, the landlord will REPAY ANOTHER FEE. It's proposterous?!

And as a tenant, my agreement states that I can end the tenancy early without a break clause as long as the landlord agrees and we have to pay if there are any void periods and any other admin fees that may occur. HOW IS IT MY FAULT that the landlord has made a RIDICULOUS agreement with the letting agent? This wasn't in my agreement? If the landlord agreed to pay half the rent and give them his left leg for "finding us", if we haven't agreed to repay SPECIFICALLY those things if we end it early, then why should we be liable? If not SURELY the contract is void as the agreement is signed with false pretences?!

Mark Alexander

10:19 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Joe Bloggs" at "24/03/2015 - 09:39":

Hi Joe

I wouldn't have agreed to a two year contract, which is what the tenant asked for, but that isn't really the point either is it?
.

Mark Alexander

10:29 AM, 24th March 2015
About 6 years ago

Reply to the comment left by "Lew Hfa" at "24/03/2015 - 09:48":

I understand your frustration, but as I said previously, your landlord is perfectly entitled to hold you to the contract that YOU negotiated with him.

On that basis you will be responsible for the rent and Council Tax for the full two year term and he will not have to pay his agent any more money.

What you need to decide is which option to go for.
.

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