Taking over tenancy agreement from letting agent

Hi Ann

There are two separate issues here.

The first is that you don’t want to increase the rent or start a new tenancy, that bit is fine, it’s your choice. Your agent cannot force you or your tenant into this. It’s your property and your agent acts for you, not the other way around. If it suits you to proceed with a statutory periodic tenancy and no rent increase then your agent MUST respect that.

With regards to terminating your relationship with your agent you must read the terms and conditions you agreed to. Your agent cannot stop you terminating the arrangement but may well be able to charge you an early termination fee if it is clearly documented in their T&C’s. If the agreement is not clear or the termination fees are buried in the small print then it can be challenged. The case law on this is OFT vs Foxtons Letting Agents – see >>> http://www.landlordlawblog.co.uk/2011/07/25/oft-v-foxtons-case-costs-foxtons-4-4-million/
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This is a constant topic here and agents will try to hold on to their income from management for as long as possible. I have now taken to using letting agents strictly on the basis that either I will pay a finders fee or, if they want to manage they can do so for 1 year at an agreed rate (and I’m usually quite generous on the percentage) but after which I have the option to terminate at any time and for any or no reason. This tends to make sure that they do a good job in the hope of retaining the long term business. Provided they deliver I will allow them to continue though I usually re-negotiate the percentage based on the amount of work they are actually doing. If agents don’t like my terms there are many who will accept with alacrity.
Frankly I don’t want to end the arrangement as I self manage enough already but it certainly seems to keep them on their toes.

Nick,

Including the option to terminate the agreement after one year sounds like an excellent idea. Would you typically do this so the year restarts if the tenant changes? If not then what would your approach be?

Thanks,
Richard

Reply to the comment left by “Richard H” at “21/06/2015 – 20:13“:

It’s not come to that so far as most of my tenants stay long term. Shortest I have at present is 3 years, one lot over 10 years. If there was a tenancy change then it’s fair to repeat the management period as they have done more work in finding and qualifying a new tenant.
The one matter which can be contentious is if the tenant wants to purchase. Agents typically want to charge a sale fee and, having been an agent for some years, I can see their point. Most agents will put in an outrageous fee, perhaps as high as 1.5% in the management agreement. If a tenant purchases they will have no work to do finding a buyer such as advertising, measuring, preparation of floor plans & particulars, photography, accompanied viewings, negotiation etc. I will go along with a fee but it needs to be agreed at the outset. I believe around half the fee typically charged by agents in the area is about right and for that they will be expected to do the contract chasing.

Thanks Nick.