Unfair Property Management Contract?

by Readers Question

13:50 PM, 15th July 2020
About 4 weeks ago

Unfair Property Management Contract?

Make Text Bigger
Unfair Property Management Contract?

I think my property management agent is proposing an unfair contract and I’d appreciate the views of the wise landlords on this forum.

For more than 10 years I have employed the same agent to manage my rental property in London. My tenant of the last 5+ years is leaving and the agent has sent me their latest property management contract, which is completely different to the previous contract. This may be because 10 years ago they were a local company with a few branches, and since then have been taken over by a bigger company, which itself is part of a network of similar businesses.

Some of the clauses in this management contract seem unreasonable and one-sided, for example:

1) If you no longer require our services you can give us 12 months notice in writing to end this agreement at the end of the sixth year of the Tenant’s stay in the Property.

2) In the event of the Tenancy ending, it is agreed that we will be re-instructed to find a replacement Tenant on a Sole Agency basis for a minimum duration of 12 weeks from the date of notice being served. If you wish to terminate our appointment you must give us 28 days notice in writing.

3) Where a Tenant introduced by us is replaced as a Tenant (whether or not under a formal Tenancy Agreement) the fee will remain payable to us for as long as the new Tenant continues to rent the Property.

4) Throughout the duration of the Tenant’s stay in the Property we reserve the right to alter our terms and conditions or administration charges by giving no less than three months written notice.

I have asked for changes to these clauses, but feel as though I’m not getting anywhere. The agent says that their other landlords aren’t worried about this contract and everything will be fine.

The property is usually let on fixed terms of between 6 and 12 months at a time to a Tenant comprising 4 individuals. While I am satisfied with the agent’s performance at the moment, I think I should be free to change agent on 2 month’s notice at any time after the first year of the tenancy if I’m not satisfied with their performance, but It looks to me as though I would have to evict the tenant in order to be able to change the agent.

Many thanks

Chris



Comments

Rennie

9:48 AM, 16th July 2020
About 4 weeks ago

For me that would equal "new agent" What a lot of twaddle - it doesn't even seem to be coherent

Dylan Morris

9:58 AM, 16th July 2020
About 4 weeks ago

I’d find a new managing agent these terms are horrendous. Remember you’re in the driving seat not the agent. As an alternative why not manage the property yourself ?

brian gill

10:06 AM, 16th July 2020
About 4 weeks ago

Definetly one to avoid. I suspect they are losing properties and trying to tie up what they have.
Even evicting the tenant wont get rid of them, clause 2 says they can start again!

NEIL T

10:15 AM, 16th July 2020
About 4 weeks ago

Yes, defo new agent. But remember if you don't like any clauses, simply strike them out. I do often and I've never hadn't any rejection.
For instance, why sign up for 3 month's when 4 weeks is fine; it gives them more incentive to get the job done.
And definitely don't sign up to them charging you a fee if subsequently you sell to the tenant.
And don't fall for the trap of paying them further commission for a new lease.

Smartermind

10:39 AM, 16th July 2020
About 4 weeks ago

Is that a property management agent or a millstone round your neck? Find a new agent, or as others have suggested strike out the unreasonable clauses.

Rennie

10:55 AM, 16th July 2020
About 4 weeks ago

Reply to the comment left by neilt at 16/07/2020 - 10:15
Yes, definitely don't let them issue new leases. Just let the the AST run on and become a contractual or statutory tenancy. They do new leases to make money from you and you don't need them. also they tie you up to a new term with the tenant whereas when they are contractual or statutory you just give the tenant the 2? month notice to leave

Chris @ Possession Friend

11:27 AM, 16th July 2020
About 4 weeks ago

First of all Chris, well done for actually READING through the proposed contract Before signing ( unfortunately in my experience, not a lot of landlords do this, and amazingly sign, where asked to by the Agent ! )
Without going through the contract, if you still want to use the agent because the staff have done a good job with your tenants previously, tell them you will only sign an amended version of the Contract, or will go elsewhere.
Change 1) to ONE Months notice, and 2) strike this out completely.
Even if you had signed an agreement, the Agent wouldn't be able to enforce 12 months notice as its been deemed an unfair term under the Consumer Rights Act 2015.

Silver Flier

7:25 AM, 17th July 2020
About 4 weeks ago

Thank you all for your encouragement, which strengthens my resolve. Unfortunately I live a long way from the property so cannot manage it myself.
The agent has started marketing the property and has failed to respond to my request to agree revisions to the contract for 10 days, so I think he's playing for time, hoping to find a tenant.

Chris

Chris @ Possession Friend

8:31 AM, 17th July 2020
About 4 weeks ago

Reply to the comment left by Silver Flier at 17/07/2020 - 07:25
I would email him pointing out that you will Not agree to a Tenancy agreement being entered into under their current contract terms and if you don't hear from them by return, you'll withdraw your property and place it with another agent.

Puzzler

10:51 AM, 18th July 2020
About 4 weeks ago

This is fully managed? If you're dissatisfied and they are in breach none of it will matter.

Clause 2 above is not a problem as you can give notice at the same time as the tenant gives theirs.

Clauses 3 and 4 are not unreasonable and quite usual.

Clause 1 is very odd. What happens if your tenant leaves after six and half years?

They can't change terms without your agreement anyway.

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Courts may adjourn possession cases without Covid-19 impact assessment

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More