Here is a question to the blog clinic from Esther who is a landlord
I use a managing agent. My tenants have had a 12 month contract but wanted to stay on after this period ended. The managing agent wanted to renew with a new 12 month contract (cost £150 split between myself & tenant) and increase rent by £25 pm.
Through email the tenants said they couldn’t afford the increase. On the phone, I explained to the managing agent I was happy to maintain the current rent and roll onto a periodic tenancy as they have been very good tenants. The agent said he would arrange this.
The tenants have continued to pay rent (and I presumed it was on our new agreement).
The managing agents are now pressing for a new 12 month contract and asking for £75 from me. Where do I stand?
Answer
In a landlord / agent situation YOU are the customer and THEY are just your agents. YOU are the one who tells THEM what to do – not vice versa!
Its YOUR property not theirs.
The reason why the agent wants the new fixed term of course, is that they want paying! However this does not justify forcing you into a new fixed term which neither you nor the tenants want.
On the other hand, it is not unreasonable for them to have some sort of payment, assuming of course that they are doing some sort of work. Although if they are managing agents they must surely be getting some sort of commission for their management work?
If they are not doing anything, you may want to consider sacking them and dealing with the management on your own.
In any event I suggest you take a look at your agency agreement and see what you have actually agreed with them regarding renewals, payment and termination of the agreement.
Not 100% clear whether this is a TFO just because the word “management” is mentioned?
“If they are not doing anything, you may want to consider sacking them and dealing with the management on your own.”
They don’t sound like they’re very good agents, but whether the landlord wants to go completely on their own will depend on several factors.
Does the landlord collect the rent and pay service charges and ground rents directly?
Does the landlord know the difference between renewing and going periodic and the legal implications?
Do they understand deposit schemes and prescribed information?
Do they want the responsibility of contacting the tenant directly?
What about dealing with everything at the end of the tenancy?
Are they happy to deal with any maintenance?
Do they understand each party’s legal rights and obligations?
We only offer fully managed services so we don’t have this problem of charging for renewals. For some tenancies we may not have much work to do during the term apart from collect the rent, but for others there may be so much effort involved that we make a loss on the management fees. It’s the old Pareto’s 80:20 principle.
‘In a landlord / agent situation YOU are the customer and THEY are just your agents. YOU are the one who tells THEM what to do – not vice versa!’
What happens when a landlord gives their agent an instruction that is wrong? Not necessarily an unlawful instruction but one that is in breach of tenancy terms.
For example, we recently had a landlord tell us that he is prepared to breach tenancy terms by failing to fix the cooker that was supplied as part of the tenancy because the property has been sold and they are just waiting for completion. In addition he doesn’t particularly like the tenant and feels their lifestyle (which routine visits have shown is a little chaotic) is a contributing factor to the oven element not working.
Not very good reasons in our opinion, and one that may possibly jeopardise the sale of his house if the tenant were to fail to vacate or cause malicious damage out of spite.
But how should the agent act in this situation? Do they have to defend their landlord actions as part of their duty to their client?
Or, pragmatically, can the Agent use their apparent authority to instruct the work and pay the invoice from the tenants next rental payment, even the client has told them not to go ahead with the works
@Jon That is a very interesting point! If you feel that your landlord is asking you to do something which you consider you are not able to do, you need to discuss this with them. If you feel strongly about it, the only real solution is to tell them that you are not prepared to act as their agent any more if they continue with their instructions.
For example if they are asking you to do something which will affect your professional reputation or which could make your company liable – for example under the Redress Schemes.
However, if you go ahead any get work done under your ‘apparent authority’ in breach of the clients express instructions he may have grounds for refusing to cover the cost (which would mean it would be bourne by your company). I suggest that if this situation arises you take a careful look at your agency terms and conditions and see what they say about this.
@Jon, that’s an interesting dilemma.
Letting agents always have two clients, of course and in a situation like that – where the landlord shows such wanton disregard for their obligation – I think any sound letting agent shoud be upfront with the tenant and let them decide next moves. Maybe they are happy to repair it themselves and deduct rent accordingly.
I do hope the tenant puts it in writing, if they haven’t already – giving you now 14 days to outline your “adequate response”. Stories like this are just another reminder of the dichotomy of landlords and their “business”.
@ Rent Rebel. Just to clarify, an agent most definitely only has one client – the landlord – but we owe a duty of care to our tenants. There is a significant legal and practical difference.
We experience problems similar to Jon’s, but our issues are with tenancy deposit disputes.
Even though we use independent clerks and we are as reasonable and as objective as possible, some landlords will simply insist on making unreasonable claims. In these situations we have no option but to raise a dispute with the TDS ourselves. But even then we are expected to put the case for the landlord even if we don’t agree with it. This makes us look bad and we lose part of our ‘no claim discount’ through no fault of our own which can push up our TDS fee significantly.
We cannot really disinstruct ourselves in these circumstances and in any case we want to remain involved out of a duty of care to the tenant.
Jamie – just to clarify, I know how it stands legally. Your contract is with the landlord, sure. But letting agents – in reality – have two clients; and will happily charge both of them, while only serving the interests of one.
That’s (one of many reasons) why I dislike letting agents so much, and never use them. What duty of care to the tenant are you fulfilling here? I see the opposite.