Here is a question to the blog clinic from Philip (not his real name) who is a landlord.
Hi, I have used a Letting agent to let my 3-bedroom property. The tenant works in barber shop.
Once moved in the tenant has converted the main living area to a barber shop and serving customers (no walk-in customer but pre-booked customers) which was a breach of contract (no business from property and heavy wear and tear)
When questioned, Tenant has replied stating, “I have clearly told the Letting agent before entered into the contract that I will be using the property for my hairdressing business. I have repainted the wall..etc which I would have not done if the Landlord is not going to allow me to run the business”
Now, Letting agent has lied to me about the tenant’s plans.
Can I cancel my contract with my letting agent since they have breached the contract and they have not acted on my interest?
You don’t say whether you are using these agents just to find the tenant or as managing agents.
You only have the tenant’s word for it that the letting agent agreed to the barber business in the property. If the contract with the agents was a ‘find tenant’ only contract, then it is possible that the tenant is lying and the agents knew nothing about it.
However, as you wish to cancel the agent’s contract this does imply that they are managing agents. In which case, assuming your management contract with them provides for them to do inspections, they should have become aware of the situation and notified you of it.
I think before doing anything you need to approach the agents and find out their side of the story. If the agents deny giving their agreement to the business then you need to consider whether this is believable or not.
So far as the desirability of the business itself is concerned, the law does now provide for ‘home businesses’ which if permitted, will not put the landlord at risk of the tenancy becoming a business tenancy and subject to the Landlord & Tenant Act 1954 – which provides for tenants to have a right to a new tenancy if they follow the proper procedure (something you won’t want).
However, can a barber’s business be considered a ‘home business’? The examples normally given are things like secretarial work, translation work and other desk-based businesses. I’m not sure that a barber’s shop falls within this category.
I suppose it will depend partly on whether any alterations have been done to the property – you only mention painting a wall and do not say whether any new sink’s or other equipment have been installed – and on the wear and tear to the property.
There is also the question of the effect of this on your insurance and also your mortgage, if you have one. There may also be planning law implications.
What you should do
The first thing to do is to read your agency agreement and see what your agents have actually contracted to do. You then need to consider whether the agents are in breach of the terms of the agreement.
If the agency agreement says nothing about home businesses, which is likely, then we need to consider whether the tenant’s desire to run a barbers business in your property is something which they should have disclosed to you in advance.
This will probably come under the s49 of the Consumer Rights Act 2015 which implies a term into all consumer contracts that the contract will be performed with ‘with reasonable care and skill’
I am inclined to think that if the agents did knowingly permit your tenant to run a barber’s shop from your premises, this will be a breach of contract which would justify your terminating their agency agreement.
However, I don’t really have enough information to be able to advise properly and I think you should get further advice before taking any action.
Your advisor (ideally a solicitor) will need
- A copy of your agency agreement
- Details of what alterations, if any have been done to the property and the effect on the property and neighbours generally of the barber business being carried out
- As much information as possible about exactly what discussions took place between the agents and the tenant before the tenant signed the tenancy agreement
This is also something you could refer to your agent’s Property Redress Scheme but I have concentrated on your right to cancel the contract.
Do readers have any thoughts? Have you been involved in any similar situations? If so please leave a comment below.
Note that my Landlord Law service has a guide for landlords who have problems with their agents which you can see here.