Letting agency contract?

Letting agency contract?

10:58 AM, 20th September 2022, About 2 weeks ago 15

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Hi, Since 2004, I’ve rented out a property using a national letting agency.

They introduced the tenant, who is still there, and since 2004 they have charged me 8% just to collect the rent.

I want to continue with the same tenant but end the contract with the agency.

But there is a term in the contract stating that they can still charge me ongoing commission even if I end the contract – because they found the tenant in the first place.

Any advice on this clause?

I don’t want to give my tenant notice, and it seems so unfair that he should leave because of this contract term.

Thank you.

R



Comments

Sanjeev Markanday

11:50 AM, 20th September 2022, About 2 weeks ago

This is a legal scam where the EA "owns" the tenant and if you have a contract that says this you are stuck. Only way is to get the tenant to vacate the property and to readvertise it as any other way you will still be liable for the renewal fees. This should be banned and is money for nothing.Am sure others on this forum will provide other advice.

Malcolm Norquoy

12:04 PM, 20th September 2022, About 2 weeks ago

Selecting the correct agent at the start is key too. I have some experience of this and some agents will negotiate to make the split more palatable.

DO NOT use Belvoir Portsmouth as they are past masters at this and every other scam. After many months of terrible service and them not performing their duties as per contract (visiting the property, confirming issues are landlord created and not tenant before making the landlord pay etc), I said I wanted to split. They wanted 2 month's rent in full for each property to allow that split. In the end I had to give the tenants notice. This caused massive issues which are still being resolved 18 months on. All because Belvoir Portsmouth did not perform their duties as per the contract. Thankfully full emails trails show them refusing to do so. To cap it all they made my life hell trying to get details of MY landlord's insurance.

I will be taking legal action against Belvoir Portsmouth once the full amount of damage and loss of earnings is fully understood. That same Landlord insurance is the only thing protecting Belvoir Portsmouth from a MASSIVE claim through the courts. I will keep the group updated to ensure people are aware how to deal with rogue and under performing agents, of which there are so many - Belvoir Portsmouth have though stood out head and shoulders as the worst of any I have dealt with in 25 years.

Sara Beadon

12:05 PM, 20th September 2022, About 2 weeks ago

As Sanjeev mentioned, you would need to terminate your contract when it was up for renewal and I suggest you use OpenRent and do the process with them. Then get the tenants to book it via Openrent and go through the process with them as if they were new tenants, and do a contract with them.

Like yourself I felt agents were taking a huge cut for doing very little other than finding the tenant so I have been using OpenRent for all my tenancies now and their fee is a flat fee of under £50 and they can also do all the back ground checks as well as do the contracts etc. You will never use another agent if you try Open Rent.

David Smith

12:51 PM, 20th September 2022, About 2 weeks ago

Reply to the comment left by Sanjeev Markanday at 20/09/2022 - 11:50
They can charge a fee if they are collecting the rent but 8% sounds a renewal fee.
So unless from the outset the Letting agent highlighted to you in Writing other than their Standard T&Cs that there is a renewal fee payable then you are not liable.
The High Court ruling was very clear on this point. They said an agent can’t hide such an important clause within their T&Cs.

I was in the process of being Sued by a major letting agent in 2009 when the OFT sought clarification in the High Court against Foxtons.
My case was dropped when Foxtons lost this case.

Get the rent paid paid to you directly and make a claim for the fee to be repaid to you.

FYI

A hearing was held on 17 December 2009 at which OFT secured a High Court Order against Foxtons Ltd. This declared formally that certain terms in Foxtons' contracts are unfair, and granted an injunction restraining Foxtons from relying on these terms (or terms of like effect), or inserting these terms into future contracts.

The ruling and order prohibit the use of sales commission and third party renewal commission in Foxton's letting contract, and require that where renewal commission is to be charged, it must be clearly brought to the consumer's attention - both in terms of the liability to pay it, the circumstances in which it will be payable, and the amount or rate at which it will be charged.

OFT expects other agents within this market, which use similar terms in their contracts with landlords to comply with this ruling and will take the necessary steps to ensure that this happens.

David Smith

14:20 PM, 20th September 2022, About 2 weeks ago

Reply to the comment left by Sara Beadon at 20/09/2022 - 12:05
If you believe the T&Cs are water tight then your suggestion will no work because the fees will still be payable whilst the tenants remain.
I tried this and got caught out. The agents will be suspicious about the property not being re-marketed and will check the Electoral Roll.

My previous post is correct advise

PH

14:25 PM, 20th September 2022, About 2 weeks ago

Reply to the comment left by Sara Beadon at 20/09/2022 - 12:05
I'm considering this route myself but I live abroad and it concerns me not having a local agent to turn to if the need arises.

Dennis Forrest View Profile

15:21 PM, 20th September 2022, About A week ago

I would just instruct the tenant to pay the rent directly to you in future. But first give him a new 12 month tenancy agreement and tell him you will be happy to let it roll on to a periodic tenancy, or keep giving him a new 12 month tenancy each time.
The agent will complain of course but just tell him to take you to court. Advise him that if it goes to court then you will contest his claim. Tell him if it goes to court you will contest his claim on the basis that the terms you originally agreed to are unfair and that not only will you not pay him 8% in future you will also try to claim back some or all of the 18 years you have paid him for doing nothing. You can suggest it might be better for him just to let the matter drop rather than risk a large retrospective claim.

Puzzler

10:27 AM, 24th September 2022, About 7 days ago

This looks like a standard monthly commission to me and so I doubt you can terminate while the current tenants are in residence. 8% is actually on the lowish side for rent collection.

The Foxtons ruling applies to the sale of the property not terminating an agency agreement

David Judd

16:22 PM, 24th September 2022, About 6 days ago

Read the contract with the agency, does it really say 8% for each renewal. If it does, write to the agent, and say at next renewal, if they don't reduce the commission to 2% you will end the tenancy and find another agent and tenant. Its not only finding the right agent, its about READING WHAT YOU SIGN. All contracts are negotiable, all of them. Don't sign if you don't understand, and if you are not happy with the terms change them. I pay 7% the 1st year, 3% 2nd year and nothing after that. OR use Openrent and do it all yourself as mentioned above

David Smith

17:10 PM, 24th September 2022, About 6 days ago

I haven’t paid a renewal fee in 20 years. And I never will there is absolutely no reason to do so.

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