Continuity of Periodic Tenancy

by Readers Question

10:07 AM, 8th February 2015
About 4 years ago

Continuity of Periodic Tenancy

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Continuity of Periodic Tenancy

I have a periodic tenancy in a property that is currently managed by a Letting Agent. Continuity of Periodic Tenancy

Should I wish to terminate my contract with the agent and manage the property myself, would I be able to retain the tenant on the same periodic agreement?

I have read the terms and conditions of the Letting Agent and as far as I can see, all that they require is 14 days notice of termination. The agent was paid their finder’s fee of 50% of the first month’s rental fee upon inception of the initial Assured Short Term Tenancy Agreement.

Many thanks

Mike C



Comments

Mark Alexander

10:11 AM, 8th February 2015
About 4 years ago

Hi Mike

If you are certain that there are no provisions for penalties, save for 14 days notice, then you should be OK to terminate your relationship with your agent and retain the tenant on SPT.

HOWEVER, do give due consideration to what will happen to the tenants deposit monies. Was Prescribed Information re-served within 30 days of the tenancy reverting to Statutory Periodic? Which scheme is the deposit protected in and how will termination of your relationship with your agent affect this?
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Mike Christian

10:46 AM, 8th February 2015
About 4 years ago

As I am not aware of the term 'Prescribed information' it is difficult to ascertain whether this was re-served or not. What I am certain about is that the tenant asked for the original Assured Short Term Tenancy agreement to revert to a periodical agreement after the initial six month term. I was not formally notified of this progression but only learned about it through a telephone call from one of the Agent's staff. I am led to believe that once formal notification of termination of contract has been served and any penalties duly paid, the Letting Agent is legally bound to allow me as Landlord, to transfer the deposit monies into another acknowledged Deposit scheme. Is this true?

Mark Alexander

11:29 AM, 8th February 2015
About 4 years ago

Reply to the comment left by "Let it Be " at "08/02/2015 - 10:46":

If Prescribed Information is not served within 30 days of the tenancy reverting to SPT then you cannot serve a section 21 notice unless you return the deposit to the tenant AND you will also be open yo a claim of up to 3 times the deposit (minimum award is one times deposit) and this is indefensible. Accordingly, I suggest you research this matter diligently and ensure that your agent has dealt with this properly. If he hasn't, you are liable to the fine but you have a right to make a claim against your agent for professional negligence.

In terms of unprotecting a deposit and re-protecting it without making any changes whatsoever to the terms of the tenancy I stongly recommend that you obtain advice in writing from the Deposit Protection provider that you intend to use.

Finally, with the greatest of respect, if you are not aware of the pitfalls associated with serving Prescribed Information in accordance with Tenancy Deposit Protection regulations do you really consider it wise to dispense with the services of a letting agent? My bfear, if I were you, would be "what else don't I know about?".

If you really want to manage your own properties then I strongly recommend that you attend a one day Landlords Accreditation course. There are several available they cost circa £150. Several organisations run these courses, they all work off the same agenda, here is one example through the National Landlords Association >>> http://www.landlords.org.uk/support-advice/landlord-accreditation

If you can tell me where you are located I may be able to refer you to an alternative Landlord Accreditation course provider that would be more convenient to you.
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Mike Christian

15:35 PM, 8th February 2015
About 4 years ago

Thanks Mark, good advice indeed and plenty of food for thought! Our decision to employ the services of the Letting Agent was for the very same reasons that you have highlighted, our lack of knowledge in this field. But, once it was felt that the tenant was reliable and our property is in sound condition, without the immediate need for expensive maintenance issues, then the need for the agent became less of an issue. once I have researched the subject and attended the Landlord's Accreditation course that you suggest, I will be more inclined to dispense with their services. I dare say that any agents reading this post might believe that we are not giving them enough credit, but hindsight is a wonderful thing and I feel that our particular agent has not earned their expensive fees, nor for that matter, their punitive penalty charges.

Mark Alexander

8:35 AM, 9th February 2015
About 4 years ago

Reply to the comment left by "Let it Be " at "08/02/2015 - 15:35":

I can totally see how you arrived at each of those conclusions because I followed the exact same logic at each step.

After 26 years in the business I'm back to where I started, using an agent. I now know what makes a good agent and how much my own time is worth. It's a no brained for me to use LettingSupermarket as they are one of the best letting agencies I've ever come across and they only charge 4% - see our letting tab above for more information
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Steve From Leicester

9:34 AM, 11th February 2015
About 4 years ago

As an agent I have to respond.

Mike - you've already discovered that agents (assuming they do their job properly) will have served something called Prescribed Information, which you'd never heard of, but could have left you struggling to get possession and resulted in you being charged three times the deposit.

Good agents do lots of other stuff too, that you'd never know about unless something suddenly turns round and bites you.

However, its fair to say that if the tenants are reliable, the property is well maintained, and nothing unexpected happens (e.g. the tenants lose their job and can't pay the rent, they split up and their lives descend into chaos, the house gets flooded or burnt down, the tenant is found ten days after he sadly died in his bed, the tenant sees a "Where there's a blame there's a claim" ad on telly and decides you're a soft touch, just to throw a few random suggestions around), then managing property is quite easy.

As you've probably guessed, most of our tenancies go nice and swimmingly and managing them is quite easy (because we only take good stock on and let them to properly referenced tenants in the first place), but we've dealt with all of the problems I've just mentioned and more besides.

That's why I've got a clause in my agreements charging my landlords a substantial exit charge if they want to keep the tenant but dispense with my services.

I don't charge my landlords extra when I have to do boat-loads of work solving a major crisis, its all part of the service. The trade-off is that I expect to get the smooth as well as the rough.

If I allowed my landlord clients to do what you're proposing, i.e. try the tenants out for a bit then save yourself some money if its a nice easy tenancy but dump it on the agent if its a problem I'd go out of business.

if your agent hasn't got a similar clause then you've got a good result and fair play to you. More fool the agent for not protecting himself in the first place.

PS Mark - I understand you have an interest in the Letting Supermarket - might I politely suggest you should declare that when promoting their services? Please correct me if I'm wrong.

Mark Alexander

10:24 AM, 11th February 2015
About 4 years ago

Reply to the comment left by "Steve From Leicester" at "11/02/2015 - 09:34":

Hi Steve

I do indeed have an interest in Letting Supermarket and that is declared many times on this website, e.g. >>> http://www.property118.com/letting-supermarket-amend-pricing/68829/ and http://www.property118.com/shares-letting-supermarket/71184/
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Mike Christian

11:52 AM, 11th February 2015
About 4 years ago

Hello Steve and thanks for your input.

Mark has advised me well regarding the prudence of retaining an Agent (albeit a diligent one who earns their fee!) and from his advice, I have decided against disposing of my Agent's services, but have asked to be better informed in future.

In such a very short time, I have gathered so much information regarding being a private landlord and the responsibilities that ensue. Property118.com and NLA being the providers of this advice and I only wished that I had been aware of their existence prior to letting our property out.

Would I be right in saying that your third paragraph paints what could loosely be termed as a 'worse case scenario' and carries with it a subtle sense of satire? I welcome your comments and view from an Agent's perspective. It all adds to being better informed in future.

With regard to Mark's 'interest' in Lettings Supermarket, he did make it very clear to me in an email that he has a vested interest in this company and was, I felt, quite transparent about the situation.

Thanks again for taking time to put an Agent's perspective into the picture.

Steve From Leicester

22:37 PM, 11th February 2015
About 4 years ago

Hi Mike - I've been in business 12 years and for the last few years we've had about 500 under management at any one time.

We've only found one dead body and only one serious fire. A few floods - ones in blocks of flats are worst especially where sewage is involved.

Quite a lot of tenants carefully managed out of properties after relationships break up etc.

Only had to help two landlords defend themselves from spurious personal injury claims ( when our management visit reports and maintenance records proved invaluable.)

Lots of landlords blissfully unaware of the legalities behind letting their property - currently a few being caught out by a new Article 4 in a popular area saved from penalties through our knowledge.

Lots of tenancies with low level hassle of one sort or another.

Many thousands of tenancies which went absolutely swimmingly, and when they do we get paid for a very modest amount of work. But on balance I think my property managers earn their money.

Mike Christian

8:44 AM, 12th February 2015
About 4 years ago

Hi Steve, both yourself and Mark have already convinced me that I was wrong to consider managing the property myself. My initial thoughts were that the Lettings Agent was being paid for doing very little, or even not enough! Since joining both NLA and Property118.com, I have been enlightened as to the potential pitfalls in taking on the task personally. This is why I have read Mark's and your advice avidly and with an open mind. A very steep learning curve indeed and one that without help in the way of experienced input, is potentially fraught with dire possibilities. What is also beneficial is that I can now approach our Agent, confidently armed with greater knowledge and hopefully their awareness that I am not now as naive as previously believed.

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