This is a question to the blog clinic from Matthew, who is a landlord in England.
As a landlord, just a small 1 bed property, my home, whilst overseas I decided to rent it with a well known high street agency.
The tenancy was set up as a 2 year fixed and that was completed about a month ago.
Because the agency had been extremely poor, I decided to move my property to a new agency, and I gave my original agency 3 months written notice that I would like to terminate with them at the end of the 2 year term. I got confirmation of this having been accepted by email from them.
My sitting tenant wanted to remain, and I told them the local agency I had relisted the property with, which he went and asked to start a new agreement.
To me, this seemed to be a non troublesome opportunity, I know the tenant, and for both of us it would seem to be a suitable proposition to go forward together, as he was also very unhappy with the original agency of not replying to emails and issues.
I looked through my agreement with the original agency and in the terms there is nothing indicating that I would be in any trouble, but I am not a lawyer.
Today I received an email from the original agency stating that because the tenant is still at the property I am liable to pay the full years commission, about 2000.00 in total.
I cannot believe this, because even my new agency had informed me there shouldn’t be any issues with this arrangement because I had given instruction to terminate, and they also had all of the terms and conditions as I handed them over to them, because obviously I was a little hesitant concerned of any issues arising.
Can anyone give me any advice and help?
Answer
This is a common problem when landlords switch agents. Whether the outgoing agent can continue charging fees depends on what’s in your contract — and whether those terms are fair under consumer law.
It’s unclear from your question when you intended the original agency to end. You say
I gave my original agency 3 months written notice that I would like to terminate with them at the end of the 2 year term
Which is not something they could really object to. However, later in your question, it looks as if you want to end their service now.
This is presumably why they are asking for a year’s worth of commission.
Assuming you are looking to end the agency agreement now there are two things that you need to do:
- Check carefully the terms of your agency agreement
- Consider whether you are entitled to end their agency agreement due to breach of contract
The agency agreement
This should state somewhere what the arrangements are for terminating the agreement. Normally, there will be a notice period, but some agents have clauses which state that the management must remain with them while the tenant they found for you is in occupation.
Whether such a clause is binding on you is debatable. The Unfair Terms rules (now part of the Consumer Rights Act 2015) provide that unfair terms are not binding on ‘consumers’.
From what you say, it looks as if you will be classed as a consumer. So the question is whether this clause is ‘unfair’ or not. You have not given the wording of any termination clause, so I am unable to comment. This is something you should take advice on.
Are the agents in breach of contract?
You say that you wish to terminate the contract with your original agents because you are unhappy with their service.
If you can show that there are serious breaches of their agency agreement, you may be entitled to end the contract on that basis, with no need for any notice period.
To check this, I suggest you go through the contract and list all the things which they have contracted to do for you.
Then, for each item, write down whether in your view they have complied with their obligation.
This may best be done in a two-column table with the obligations in one column and your comments alongside in the other column.
Once you have done this, again, it may be best to take legal advice on whether their breaches of contract are sufficient to justify terminating the contract immediately.
And finally
I hope this has been helpful.
Note that my Landlord Law service has a Problem Letting Agents Guide’, linked below, which will guide you through this process.