Is letting agent trying to take advantage?

Is letting agent trying to take advantage?

by Readers Question

Guest Author

0:01 AM, 27th July 2023, About 11 months ago 6

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Hello, I am a professional letting agent and I am trying to assist one of our landlords with an issue that relates to another firm. Mrs X instructed the agent to let and manage the property as she was unwell and she wanted the security of an agent to support her.

She then went on to self-manage and gave notice in line with T&C’s to the agent. The tenant is still in the house.

LA have been sending invoices to the landlord for a renewal commission when the landlord renewed the tenancy directly with the tenant. I am not sure if it’s fixed term or periodic.

The agents’ terms say in the small print the landlord will be liable for a fee of 8% term rent when the tenancy is renewed.

I’ve got no financial gain or interest in making any money here, but she is an unwell and elderly woman becoming more and more stressed with the situation

Please help!

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9:47 AM, 27th July 2023, About 11 months ago

End tenancy at 12am on one day and issue a new tenancy 1hr later then its not a renewal its a new tenancy i know you will have to do all the moving out and checks but 8% is a lot are is it periodic so 8% of 1 months rent then give new tenancy

Nikki Palmer

9:48 AM, 27th July 2023, About 11 months ago

I can't see how there is even a contract in place with the original agent.
Whilst I appreciate it is worrying for her, I would disregard it.

Perhaps pen a letter on her behalf (for her to sign) requesting there is no further communication from them?


9:50 AM, 27th July 2023, About 11 months ago

Has the Tenant signed a new tenancy agreement ?
If it goes periodic then No changes needed.

Simon M

10:42 AM, 27th July 2023, About 11 months ago

In general, the reason for the contract clause is to compensate the agent if a landlord agrees a new contract with a tenant, cutting out the agent. The termination clause in the managing agent&#39s contract should take precedence.
Even if they&#39re badly-worded in principle a legal dispute should favour Mrs X who has least power in agreeing the contract.
If Mrs X terminated the agent&#39s contract, and the agent actively managed the tenancy during the notice period and Mrs X renewed, then they might have a slim argument.
Mrs X should ask for the agent&#39s complaint procedure. Then follow it to raise a formal complaint. If they don&#39t back down, she may need to appeal. This should be successful but if not then send the mess to the agent&#39s property ombudsman. Do it all by email or keep copies of letters. It's not a huge amount of work.
Mrs X must double check she has all the prescribed information. If there&#39s any doubt, include a request for the agent to confirm they complied with the legal requirements and have supplied all documentation.

David Smith

12:43 PM, 27th July 2023, About 11 months ago

Did the Letting Agent make it known other than in their Standard T&Cs that there was a renewal fee? They can not hide such an important clause.
If not then Renewal fee is not enforceable. ( OFT V Foxtons )

Does the Letting agent have any ongoing involvement ?
If not then same as above.

I had the same situation but had court action against me dropped when the OFT was the High Court case in 2008.

I have never paid a renewal fee based on the above and never will.

Silver Flier

5:42 AM, 29th July 2023, About 11 months ago

Some agents like to pretend that tenants, who you have already paid them to find, are "theirs" for as long as they stay in your property, and even if they buy it from you! They thus expect commission on the rent for as long as the tenant stays, as well as on the sale should "their" tenant buy it. Of course such agents only regard the tenants as "theirs" for as long as everything is going well. Should "their" tenant trash your house, stop paying rent, sub-let, turn it into a cannabis farm etc. the tenant will of course immediately become "yours" and the agent will deny any and all responsibility for them.

I don't know if this "their" tenant nonsense has ever been challenged in court, but I wouldn't want to have to bear the cost of challenging it. One agent, who I still use, has T&C that include such on-going commissions. After he refused to remove them from the contract I decided to accept them because I'm reasonably sure that the tenant won't stay long term.

You state that Mrs X gave notice that she would self-manage in line with the T&Cs, but that an 8% commission is still due on renewal. I think Mrs X is probably bound by the 8% commission in the T&C even if she hasn't signed them - my agent states that if you instruct them to market the property you are deemed to have accepted all their T&Cs. In order to avoid having to go to court either Mrs X or her representative needs to negotiate with the agent. The agent doesn't know what her new agreement with the tenant is. In my opinion a reasonable agent should settle for 8% of 2 months rent, effectively 2 months notice, particularly since she has already given him notice.

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