Here is a question to the blog clinic from Christine (not her real name) who is a landlord
I used an estate agent to find the tenants.
The agent did not provide a good service. So after the Assured Shorthold Tenancy Agreement ended. we decided not go through the agency .
The estate agent is now threatening to take me to court to pay the one month fee. As they have found out that the tenants are still in the property. in my contract it states
“Tenancy means the entire period that the tenant is in the property including any extension or continuation of the contractual tenancy or any statutory periodic tenancy arising after the expiry of the original Term”
Can I do anything – can i ignore them, they are threatening to take me to court. Help!
Answer
You don’t give any details about their poor service. If this was serious or involved a breach of the terms of their agreement, then you are entitled to end the agreement anyway on that basis.
So for example
- if they have failed to carry out inspection visits (assuming this was not because the tenants would not let them in, which would not be their fault),
- have not checked the tenants references properly, or
- failed to pay your rent to you at the proper times etc.
Otherwise, we need to look to the clause in their agreement and see if it is binding.
You may be aware that there was a case on this point, OFT v. Foxtons in 2010.
This case is authority for such a clause not being binding under the Unfair Terms in Consumer Contracts Regulations 1999 if it was not drawn to the landlords attention before signing and if it is open ended, as is the case here.
However, you have not quoted the whole of the agreement and there may be other clauses which are relevant.
There is a world of difference between someone threatening court proceedings and actually issuing them. So ignoring them is one option. Or writing to tell them that you have stopped using them due to their breach of contract (if this is in fact the case).
However if they do actually take you to court (or if you think that they will actually do this) the best thing to do would be to seek legal advice from a reputable firm of solicitors experienced in landlord and tenant work.
Note also that there is a section of Landlord Law which gives guidance on this type of situation here.
There are two distinct situations.
The first is whether the agent can be entitled to “continuing commission” irrespective of whether he continues to act. The law says he can be provided that the provision is highlighted to the client before he signs up.
The second is whether an agent can be entitled to manage a property during the period that a tenant they introduced remains in occupation. I think it has to be the case, though I cannot find any authority to support the view, that the parties to an agreement to provide ongoing services must know at any given moment the maximum duration of the agreement.
If I am right, the following are fine:
(a) An agreement for a fixed period
(b) An agreement which can be ended by either party giving the other notice
(c) A hybrid of (a) and (b) i.e. an agreement for a fixed period which continues until ended by either party giving the other notice
(d) An agreement in form (a) or (c) which provides for it to end earlier than the term date if the tenancy ends earlier
and the following are not fine:
(e) An agreement expressed to continue for as long x remains in occupation
(f) An agreement expressed to end on a specified date but which if x is in occupation on that date continues until x vacates
(g) An agreement which can only be terminated by notice by the agent
Someone needs to look in an authoritative volume on the law of agency to see what the position is.
Quite apart from all the above, as Tessa says, where one party is in breach the other can end the agreement if the breach is sufficently serious.