Here is a question to the blog clinic from Katherine who is a landlord:
I am currently being taken to court by my agent and would appreciate some advice.
In the first instance I read my contract with the agent and noticed a bit which was under the heading Tenant introduction in the T and C. It said :
“If letting continues beyond the original letting period, whether pursuant to the original tenancy agreement of a continuation, extension or renewal of the term originally granted or any new tenancy granted to the same tenant or any person nominated or introduced by the original tenant, our commission is payable as set out above.”
The fee set out above is 5% minimum, with no maximum.
However a later clause says that if the tenancy drops down to let only – which this was, then the renewal fee of 5% will apply.
This clause is accompanied by clauses about selling the property and commission involved in this and if the the property is sold with a sitting tenant and fee due then.
I crossed out the term I wrote out in full full above and wrote “no” next to it. I phoned the agent before I signed and asked that he remove this clause form the agreement as it was unfair and constituted a lock in.
The agreement had no provision for me to sign the bottom of every page and there was no provision for them to sign and send me back a copy – although I have done that before and never been sent my copy.
When renewal came up I did not pay as I contested it on the grounds I had not agreed to this term in the first place and that it was unfair. In addition they only contacted my tenant 4 days after the initial term was up, and they contacted me after they spoke to the tenant telling them the tenant that I wanted to increase the rent – when they had not even spoken to me.
The tenant was appalled and eventually phoned me. We found out that I had been phoned second. The agent had claimed to me that the tenant wanted to renew for a year. I told the agent that I did not and when I phoned the tenant neither did they.
This was dropped for about a year when they contacted me again out of the blue and tried to charge me for the renewal for that year.
I told them that the original tenant they had placed had since moved out and that I would not pay for them doing nothing at all.
They are now taking me to court for the renewal fee for year 2. How does the ruling apply to my contract and my situation?
You don’t say whether they have actually started court action or whether they have just written to you threatening it. There is a very big difference between the two.
Agents in this type of situation will often write threatening to take you to court but with actually no intention of doing this, simply to put you under pressure to pay what they want to avoid court action.
What to do when signing an agency agreement
This case is a classic example of what not to do when signing up with an agent. In particular landlords should:
- ALWAYS keep a record of any discussions regarding changes to the contact – if things are discussed on the phone or in a meeting, then confirm this immediately in a letter or by email so there is some proof of what was said
- ALWAYS make sure you have a copy of the agreement as signed (in your case with the clause crossed out). Take a copy of it after you have signed it before sending it back to the agent. Don’t wait for them to send a copy back to you – often they won’t. If you sign in their office, don’t leave the building until you have a copy of what you have signed.
It is essential that if you change the terms of the agreement you sign, you are in a position to prove this if you are subsequently sued under it. Otherwise there is no point in changing it!
Letting agents are not necessarily your friends, whatever they may say to you at the time. You need to guard your interests and watch your back.
Looking at your case
If the agents claim that the agreement was unchanged, you will need (if proceedings are issued) to defend on the basis that it was. As there does not appear to be any documentary proof of this, you will (if this ever comes to a hearing) have to give oral evidence to the Judge explaining what happened.
It will then be up to the Judge to decide who he believes. You can point out that your evidence is corroborated by the fact that they did not invoice you for the commission at the time – which they would surely have done in normal circumstances.
However, even if you had signed the contract with the clause in situ, I think you would have a defence to their claim, in view of their conduct in entering into discussions with the tenant without your prior agreement. This should form a ‘second string’ to your defence.
Agents act for landlords not the other way around. They are supposed to do what YOU want. You are the client.
Suggestions on what to do now
I suggest you write to them saying something along the following lines:
- The commission clause they seek to rely on was crossed out by you before signing the agency contract and was never a part of your contract. They are therefore not entitled to claim commission under it
- Even if the clause had been included, you would have been entitled to challenge their right to commission in view of the fact that they failed to consult you before contacting the tenant regarding the renewal and proposed terms which were against the wishes of both yourself and the tenant. The eventual renewal was deal with by you direct with the tenant (assuming this is what actually happened).
- That whether or not they issue court proceedings is entirely up to them, but if they do, the proceedings will be vigorously defended. You will be asking the Judge to award your costs in full, and you reserve the right to refer this letter to the Judge at that time.
Hopefully that will put them off ever starting legal proceedings and you will hear no more from them. I suspect that they are probably writing to you because they are in financial difficulties and are trawling through their files to see where they can make a claim.
However if they have actually issued proceedings and you have been served with a summons, you should go to see a solicitor immediately as you will need to file a proper defence to the claim.
As you do not have documentary proof of the change to the contract I think the defence would be better drafted by an experienced litigation solicitor.
The Landlord Law letting agent dismissal guide – note that any landlords in dispute with their agents will find a helpful section on my Landlord Law site >> here.