What is the ‘remaining term’ of a periodic tenancy?

by Readers Question

6 months ago

What is the ‘remaining term’ of a periodic tenancy?

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What is the ‘remaining term’ of a periodic tenancy?

I wish to remove some of my properties from Haart Lettings in Fleet due to several reasons. These include be over-charged by tradesmen they have employed, lack of property management and generally very poor value for money.

When raising the question of how much notice was required to take back management myself, I was told (in summary) that 2 months notice plus the ‘remaining term of the periodic tenancy’. However, they would be prepared to limit this to a year’s fees!

I found this wording somewhat odd, so questioned whether the term of a periodic tenancy was in fact only a month as the same is merely a rolling month on month contract? The answer was that it was as long as that tenant remained a tenant in that property.

So in other words, Haart are saying that unless I evict the tenant that I paid a tenant finder fee for, and referencing fee as well as rent guarantee insurance, then the tenant provides a continued obligation for me to pay Haart management fees regardless of whether they are performing any work or not?

My gut feeling is telling me that this is pure bully boy tactics to maintain their income and there is no such thing in law as the remaining term of a periodic tenancy.

I would be pleased to hear any opinions and/or experience from others..

I have posted below the clauses in the contract that they are saying define this, although I have to say that I don’t read them that way at all.

Copied from the Letting Agent’s Branch Manager’s e-mail

In order to end the management of these two properties, you would need to serve 60 days’ notice in writing (which, due to the delay, I can to back-date to the 1st August) as per clause 7.1.3 of Terms of Business (TOB) version 1115 and version 0514 (“Either party may terminate this agreement by giving the other 60 clear days prior written notice of termination. Following termination the Landlord remains liable to pay to haart the amount of any fees due under clause 1.3 for any remaining term of the tenancy in question, together with other fees due. The full amount of such unpaid fees is due and payable at the date of termination and haart can set off the amount of such unpaid fees against any monies owed or to be paid to the Landlord by haart.”).

Once this clause is served, the following fees would be due as per clause 1.3 of TOB 1115 (“By agreeing to purchase haart’s Full Management and/or Rent Collection service (as set out in this agreement) the Landlord agrees to pay to haart fees at the rate set out in the Confirmation
of Marketing. If the Landlord terminates this agreement in accordance with its terms prior to the expected termination date of the original tenancy and any extension in question (including the remaining term of any periodic tenancy) they will remain liable to pay to haart those fees due for Full Management and/or Rent Collection for the remaining term as set out in the Confirmation of Marketing. For tenancy terms of less than 12 months, a minimum of 12 months fees will be chargeable.”)

…and clause 1.3 of TOB 0514 (“By agreeing to purchase haart’s Full Management and/or Rent Collection service (as set out in this agreement) the Landlord agrees to pay to haart fees at the rate set out in the Confirmation of Marketing. If the Landlord terminates this agreement in accordance with its terms prior to the expected termination date of the original tenancy and any extension in question (including the remaining term of any periodic tenancy) they will remain liable to pay to haart those fees due for Full Management and/or Rent Collection for the remaining term as set out in the Confirmation of Marketing.”)

Given that both tenancies are now periodic, we would only be looking to recover fees for 12 months on both properties, and none thereafter (if they stay for longer than 12 months from the (date)

André



Comments

Neil Patterson

6 months ago

Hi Andre,

This is one of our most common questions and it is not unusual to get caught paying renewal fees until the tenant is action removed or leaves.

Requesting 12 months is one of the shorter renewal term contracts I have seen.

Andre Gysler

6 months ago

This is not a renewal, this is a termination fee for my agreement with the letting agent if the tenant is to remain in situ. However my question is does a periodic tenancy have a remaining term ?

Neil Patterson

6 months ago

A periodic tenancy has no fixed term. Therefore, you could say it has no remaining term or the remaining term has no end date.

I am not sure this helps though.

Andre Gysler

6 months ago

Is there any case law that has defined whether a Periodic Tenancy has a term and if so, how long?

If a new tenancy is signed with the existing tenants, would that be seen as ending any 'remaining term'?

I forgot to add that these tenants have been there for 3-4 years and Haart have renegotiated 1 AST besides the initial AST. The latter turned Periodic around July 2017.

Rob Crawford

6 months ago

The periodic term is established at the beginning of the fixed term. If rent is paid monthly then periodic term is monthly, essentially a new period starts on rent payment. What I think they are saying is that you can give the agent two months notice at anytime but the end of the notice period will be the day prior to the start of the next rent period after the two months. They would charge you a minimum of 12 months agent fees (not rent), subject to the tenants remaining for this period. The fee minimum is 12 months fees so the fact that it's a monthly periodic is irrelevant. This could be challenged if incompetence / negligence or non compliance with their terms in providing the service can be proven.

Andre Gysler

6 months ago

Indeed Rob, they are saying that they would 'limit' the fees to a maximum of 12 months + 2 months as notice. They want a total of 14 months worth of fees but only provide 2 months management for that.

The terms state "If the Landlord terminates this agreement in accordance with its terms prior to the expected termination date of the original tenancy and any extension in question (including the remaining term of any periodic tenancy) they will remain liable to pay to haart those fees". I wonder what 'the expected termination date of a periodic tenancy is? It doesn't mention anything about a scenario where a totally new AST is signed. What if I signed a new AST directly with the tenant, would that in effect limit the remaining term of the periodic tenancy to 1 month? Or better still, if my wife signed a new AST with the tenant as she is not a signatory to the agreement with Haart?

Rob Spencer

6 months ago

I appreciate this isn't the answer to your question but I wonder whether breach of contract would be an alternative avenue to look at in your circumstances to achieve a mutual separation of ways.

Andre Gysler

6 months ago

Rob, thanks. The thought had crossed my mind.

A couple of areas where they have breached is not performing annual inspections as detailed in their TOB and (to my mind) a significant delay in reporting storm damage to me recently, taking several weeks to report 5 fence panels etc needed replacement. I only found this out as something didn't sit right with me, so I wrote to the tenant myself and we spoke on the phone.

It also emerged that Haart charged both the tenant and me for the last renegotiated contract, which I believe is not allowed legally.

Rob Spencer

6 months ago

Reply to the comment left by Andre Gysler at 27/02/2018 - 14:11Well that doesn't sound helpful of your agent. If your thinking of this route of course the more evidence you collate the stronger your case. If you are willing to risk a possible further deterioration in this relationship it won't cost you anything to write a letter putting this to the agent and suggesting a mutual agreement to prevent costly legal proceedings. I think if the agent realises they have made significant failures they would probably prefer a non costly pragmatic solution.

david porter

6 months ago

ask to see the tradesmans receipts,
then ask the tradesman of they had paid the letting agent a commision, ask the letting agent if they have received a commision fron the tradesman. If so
Then call your lawyer.

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