Updating post from Reddit.
I signed up with an estate agent in a rent collection basis last July. They found me a tenant and I paid all their initial fees.
I asked the estate agent if the tenant could pay me directly, the estate agent agreed and I have this proof in an email. I also have the deposit assured in TDS under my name.
I have already asked the estate agent to not renew the rent collection service in July as that means me paying all the substantial fees again. The estate agent (the guy I was dealing with) confirmed the rent collection service would not be renewed but said as long as the tenant they found lives there, I still have to pay them those fees???
Is that even enforceable? The estate agents are doing absolutely nothing atm and can't evict the tenant and can't force me to pay their fees surely?
Yes you signed a contract with them.
Your options are to continue with the contract, paying their fees, in which case it makes sense to make maximum use of their services provided under those fees.
Or end the contract with the agency - at which point you'd have exit fees to pay no doubt.
And next time you need to negotiate a fixed price tenant finding fee instead if you want to avoid this in future.
Pretty normal clause for agents to be fair. Always best to check and understand what you are signing
Can't I just end the tenancy with the tenants and draw up my own contract with them?
There may be a fee because they found you the tenant.
However they have probably put themselves in breach of something.
The clause you quoted further up indicates that you cannot.
What does your contract say?
Upon the tenancy continuing as statutory periodic tenancy or periodic tenancy (this is where a tenant remains in occupation without a new agreement) our fees, calculated as agreed in respect of the original letting, will be due annually in advance within 14 days of invoicing together with the Tenancy Extension or Rent Review Service Fee as set out in “Additional Charges”.
Where permitted under the regulations in place at the time the tenancy is extended by a new fixed term (whether or not we carry out the negotiations) this will incur a fee, calculated and payable as agreed in respect of the original letting together with the Tenancy Extension and Rent Review Service Fee as set out in “Additional Charges”.
There you go, then. If the tenant they found remains in the property, you’re liable to pay.
But I could evict the tenant. Then immediately reinstate them on my own terms. How can they find out? They can't enter my flat nor snoop around my tenant's bills.
Well, you can roll the dice and find out, I suppose. But if the letting agent wanted to take you to small claims court for breach of contract it would be very easy for them to prove the tenants still live there - council tax records, for a start.
They may not enforce it, that’s your gamble to take. But you would be in breach of the contract you signed.
They have excellent networks. They're estate agents. And you can't do much about it if they do find out because you can't evict the tenant on a whim once renters rights bill comes in.
Just negotiate a fixed price tenant finding fee instead of a % next time.
But then the tenant could just info the agent. They would still be living there.
Bro. Just pay them or pay the exit fees.
Jesus Christ.
You asked them to do a job, signed a contract for that, and now you’re trying to shaft them.
Take a step back, learn a lesson from all this and take the hit - from wherever it comes.
Please Keep it Civil
I'm happy to pay exit fees. But estate agents are saying if the tenant remains there (which they will do) I will still have to pay them a monthly fee
Next time use OpenRent
down to contract.. but even if in there you can argue that they didn't make you sufficiently aware (see foxton's case) and you can also argue unfair terms and conditions...
I had that with an EA I had to sack for being rubbish, went to court.. I won arguing both of those...
Nice.
It is increasingly common for scams that estate agents include in their contracts. You can either call their bluff and fight it in court if they decide to take that route or evict the tenant to end the liability. Alternatively, you can view it as a learning experience- read the contract and pay the fee (you may as well continue their service instead of paying for nothing).
Look at exit clauses, it may be possible to give them 6 months notice. Where you continue to pay for six months and thereafter you're Free!
You may want to email NRLA. I think they should be campaigning on this and warning members.
The 6 month notice ploy may be the one I go down... Thanks!
Office of Fair Trading v Foxtons Ltd [2009] EWHC 1681 (Ch) High Court of Justice (Chancery Division) Judgment Date: 10 July 2009
Foxtons’ agreement said fees were due:
Automatic renewal fees can be unfair - Particularly if the agent provides no new service. - Such clauses were found to be a “trap for the unwary”.
Lack of transparency - Terms were often buried in small print and not explained to landlords. - Many landlords did not realise they’d continue paying fees after the fixed term.
Unfair terms are unenforceable - Under UTCCRs (and now the Consumer Rights Act 2015), clauses causing a significant imbalance in favour of the agent are unenforceable.
If your letting agent is charging a renewal fee when a tenant stays under an SPT:
This is brilliant! Thank you, will defo bring it up when I see the estate agents. Maybe can negotiate a way out of their renewal fess
Phenomenal reply!
What's the notice period of your contract with the agent?
6 months
My question is, how can they know the tenant they introduced is still living there? They can't pursue a tenant
They don't need to pursue the tenant. The contract is with you. You have an agreement for a service, for which the agent presumably charges a monthly fee/percentage of the rent. After entering the contract, you changed the arrangement, but you have not ended the contract. You need to end the contract according to the terms of that contract.
So they're saying even if I end the rent collection contract with them I still have to pay fees if the tenant remains there...
That’s what you signed, I’m afraid.
They can just ask the tenant to confirm their address as there are deposit moneys to return for example.
A contract is only as good as the person defending it. Ignore them and go from there
No it is not enforceable. Let them threaten court action. It is your tenant, the agent is an extension of you.