Termination of contract fee is extortionate

by Readers Question

10:03 AM, 1st July 2019
About A year ago

Termination of contract fee is extortionate

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Termination of contract fee is extortionate

I pay £70 a month for an agent to collect rent on my property. For this they have done nothing since finding the tenant. Oh yes, they did an inventory, but it never materialised.

With 2 months’ notice of the end of the 1 year tenancy, they want to charge £600 to let me take over management of the tenancy myself. The tenants have become my friends and are happy with my proposal.

Do I really have to “buy” them from the agent a second time?

Mary


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Comments

Neil Patterson

10:09 AM, 1st July 2019
About A year ago

Hi Mary,

I am more concerned there is no inventory even if you say the tenants have become friends. This can often go wrong when money is involved.

You do need to check the contract with your agents to see what you signed first though when it comes to the charges.

Stewart W Campbell

11:21 AM, 1st July 2019
About A year ago

I had a worse problem with my agent who for years was reasonable, but then the service dropped off and the agent LIED to my tenants saying the were waiting for my approval for a repair when they had not even contacted me. after complaining I decided to end the relationship, but their contract had a clause which said that I could NOT TERMINATE until the tenant had left the property for a year and not returning. I took this to the Property OMBUDSMAN who took some months to review my complaints, and I won the case and some compensation, but I have to pay a termination fee. which is worth it. There is a lot of Admin you need to set up and do, such as Deposits, bank standing orders and replacement contracts etc.

Ian Narbeth

12:22 PM, 1st July 2019
About A year ago

What agreement do you have with the agents? What does it say about termination? Did you pay a separate fee for finding the tenants initially? Is the £70 a management fee for ongoing management?

Alistair N

13:59 PM, 1st July 2019
About A year ago

Sadly we all get caught by this at some time in our lives it's the penalty for not taking the proper time to read the whole agreement before we sign usually when were young and felt we'd took foolish if we asked for that time. I now look foolish and take the time and ask questions. BUT not always !!!!
CAR HIRE IS THE WORST OFFENDER.

Mary

15:03 PM, 1st July 2019
About A year ago

Thanks all, sounds like a minefield out there in nice landlord land!
Mary

Mary

15:07 PM, 1st July 2019
About A year ago

Yes Ian, I am paying for the original tenant find service (and a 1 year contract) plus £70 per month for "part management" which seems to be just rent collection which I can easily do myself.

Ian Narbeth

15:24 PM, 1st July 2019
About A year ago

Mary
Can you answer my first two questions please?

Anne Nixon

16:40 PM, 1st July 2019
About A year ago

I am currently living with something similar but 10 times worse!! Back in November, trying to pre-empt problems I contacted the agent who manages my three student properties to check what their terms were with regard to my removing my properties from their management and I was told they needed 3 months notice which I duly gave, this was because I was going to sell the properties ready for the new academic year in July.
The agent offered for the 3 houses himself and I duly accepted the offer but 6 weeks later he withdrew from the purchases and so I placed them with an estate agent and a buyer was soon found.
A month after withdrawing from the purchases the managing agent had, without my knowledge, gone ahead and re-let the houses for the new academic year beginning in July and then informed me that I owe £4,000+vat as compensation for 'lost' rent resulting from the new tenancies not being under their management, and that if I did not pay I would not receive the tenancy paperwork, ASTs & TDS etc.
He said he 'understood' that my instruction had been superseded by his offer.
I protested that I had already given him 7 months notice and had not wanted him to enter into new agreements on my behalf and it should be I who was compensated not him, but he wouldn't move and so trying to avoid conflict I agreed to pay him a normal tenant find fee (which was about 50% of what he was demanding).
After 3 months impasse with increasingly acrimonious emails flying back and forth I paid him what he asked as I was in danger of losing the sales of the properties.
So now he refuses to do end of tenancy checks (he doesn't have time!!) and says he will just return the deposits to the tenants regardless.
Having a solicitor on the case hasn't helped and my intention is to lodge a formal complaint with ARLA but I can't help thinking this is not enough. I'm now wondering about contacting the ombudsman as mentioned above?

Luke P

17:36 PM, 1st July 2019
About A year ago

Reply to the comment left by Anne Nixon at 01/07/2019 - 16:40
File a Small Claim. You’ll win.

Stewart W Campbell

18:39 PM, 1st July 2019
About A year ago

Reply to the comment left by Anne Nixon at 01/07/2019 - 16:40
I thought I had a good chance of winning as I store ALL emails both ways, the Agent was unable to disprove the detail I had on all the incidents. Also the Contract Clause was OBVIOUSLY unbalanced giving me no termination possibility. I have also won a number of Small Claims Court cases again having lots of detail, the SMC is sometimes quicker and if you have an expert who knows his job . But the Ombudsman has more clout the agents are signed up and have to accept the decision.

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