This is a question to the blog clinic from Stephen, who is a landlord in England.
I am seeking legal advice and support regarding a dispute with my letting agent over an exit fee they are attempting to enforce as part of ending their property management services.
I am a private landlord with only one rental property. Since 2018, the property has been managed by a local estate agent. I’ve had multiple tenants throughout the years and paid all required introductory fees without issue.
The current tenant is on a rolling monthly contract following the expiry of the fixed term. Due to rising costs, I have decided to manage the property myself. However, after requesting a copy of the original 2018 contract, I was surprised to find a clause requiring a 12-month management fee to terminate the agreement, even though:
The tenancy is now periodic. No further service is being provided by the agent. The termination would involve minimal administrative work.
I find these fees excessive and unreasonable. I have tried to negotiate, offering the equivalent of three months’ fees as a compromise, but the agent has been unwilling to engage in a constructive resolution.
My Key Concerns:
The termination clause may be unenforceable under the Consumer Rights Act 2015 and the Unfair Terms in Consumer Contracts Regulations 1999, especially as I am a non-commercial landlord.
Support I Am Seeking:
Legal advice on whether the termination clause is enforceable in this context.
Guidance on my rights under relevant consumer legislation.
Recommendations on how to formally dispute the charge.
Any other guidance and support you may find necessary.
Answer
I agree with you that the termination clause is probably unenforceable under the consumer legislation. 12 months’ notice, where the agents are not actually doing any management work, sounds excessive to me. There are two courses of action open to you:
1. Refer your complaint to your agents’ property redress scheme
I note that your own negotiations with the agents have not been successful. This means that you can now bring a complaint to your agent’s Property Redress Scheme. All agents should belong to one of the two schemes, failure to do so makes the agency unlawful. The schemes and their websites are:
Both schemes’ websites have detailed guidance on what you need to do to bring a complaint. Or you could ring them up and have a word with them.
2. Just write and cancel the agreement
If you don’t want to do this, then you could just write to the agents saying:
- that you wish to terminate the agreement,
- that you will give them 3 months’ notice commission, after which no payments will be made, and
- that you consider their clause requiring 12 months’ notice is unenforceable under the consumer legislation.
Before doing this, you should:
- Ensure that you have obtained all paperwork from the agents (as they may refuse to provide anything once you have given notice) and
- Tell your tenants that your agents have been disinstructed and arrange for all payments of rent to be paid direct to you from now on (if they are not doing this already). If the tenants pay rent to the agents, they will almost certainly withhold it to cover their disputed fees.
I think it is unlikely that the agents will sue you for the disputed agency fees, as they will not want to risk a court claim where a court holds that their clause is unlawful! But if you are worried about this, the Property Redress Scheme service is the safer option.
Further information
We have a special guide on my Landlord Law site for members, which looks at disputes with letting agents, which goes into a lot more detail, which you can read about here. You would also, as a member, be able to ask me additional questions on our Members Forum.
“that you consider their clause requiring 12 months’ notice is unenforceable”
It’s not 12 months’ notice, it is 12 months’ management fee.
Probably also unenforceable but the landlord should have read the agreement before signing it. It doesn’t bode well for future self managing.