This is a question to the blog clinic from Paul (not his real name) who is a landlord in England.
I purchased a property with a tenant in situ and managed by an estate agent. Just before the completion of the purchase the tenancy agreement was due for renewal. The estate agents told me the tenant had originally agreed to renew and then instead opted for a statutory periodic rolling contract as they were looking to move and didn’t want to be committed to a fixed period. I decided to retain the estate agent to manage the property until the tenant left incase issues arose with rent payments.
After 4 months, the tenant is still looking, but happy to pay the increased rent with the rolling contract. After discussing with the tenant I decided I would take over the tenancy management and give notice to the agency.
But the agents are not willing to cancel the management contract until the tenant vacates pointing to a clause in the agency contract.
Period of Letting Service
Our Letting Service starts at the beginning of the first tenancy and lasts whilst a tenant we have introduced remains in residenceI’m arguing this doesn’t apply as the tenant was already in situ and not a new tenant I asked them to find.
Could you kindly advise how I should proceed?
Answer
As the agency agreement was signed with the original landlord not you, the rights the agents have against you will depend on the agreement reached between you when you took over the property. So I suggest you look back and see what exactly was agreed with them.
If it was agreed that you would take over the agency agreement from the old landlord, then your rights will depend on whether you can be classed as a ‘consumer’ landlord.
For example, if you are a professional full-time landlord and/or you bought the property through a limited company, then you will be classed as a ‘trader’ and will not be able to take advantage of the various consumer laws which exist to protect non-traders.
If you are classed as a trader, then you are probably bound by the clause in the agreement – assuming they can prove that you agreed to take over the agency contract.
However, if you are classed as a ‘consumer’, then it is arguable that the clause is unfair under the Unfair Terms rules in the Consumer Rights Act 2015.
There are also the ‘off-site’ contracts regulations, which provide that if you (if you are a consumer) sign a contract with a business outside their office, then they must give you proper notice of the regulations and a 14 day cancellation notice. Until this is done, you have the right to cancel.
There isn’t really enough information provided to advise fully, so I suggest you get some advice from a specialist landlord and tenant solicitor, for example, one of the firms on our telephone advice service panel.
We also have a fairly detailed guide for Landlord law members, written for landlords experiencing problems with their letting agents, which would be useful for you.