Landlord v Agents

[Penpusher]

Hi all

A friend of mine has been renting out his house for the last 4 years via a letting agency which deducted its Full Management Fee every month from the rent proceeds. In July the existing tenants gave notice and my friend gave instructions for the agency to look for new tenants.

Prior to the tenants leaving, the agency said that they would no longer carry out an inventory check, as part of the Full Management Fee, and that we would have to pay extra amount for the service. This led my friend to ask the question "Well what IS included in the Full Management Fee?" as the brochure advising what was offered was pretty but vague and short of detail. No answer.

Despite repeated e-mails this continued by which time new tenants were found and entered the property.

When the first payment was received, a fee of £120 was deducted from the rents, for the Tenancy Agreement. My friend was somewhat peeved as over the past 4 years, on the original basis and with two sets of the tenants, the last change being 2 ½ years ago, no such fee had been made nor was he advised that there had been a change in the existing arrangements.

The agency said that the fee was introduced two years ago and agreed to refund £60 "because we value your custom". In September, a month after the new tenants entered the property, the agency sent a formal Terms of Business which they originally claimed, and later rescinded, had been sent prior to the new tenants moving in but, they subsequently agreed, was never in fact sent.

My friend is totally fed up with the agency and would like to get rid of them but, under the new Terms of Business, which adds in all sorts of additional charges that had been inclusive, he would have to give 12 months notice.

Is he bound by a contract that was presented after the deed was done or does the previous, beneficial, arrangement still hold sway?

 

[kulture]

He is only bound by a contract that he has agreed to. If he had not seen, or been given an oportunity to see the new contract then he is still bound by the old one.

That said did he sign ANYTHING, and if so did it have in the small print any words like "and I agree to the terms and conditions which I have been given a copy of...." Because they can then say we gave you a copy and you signed saying you had them.

 

[bwglaw]

Prior to the tenants leaving, the agency said that they would no longer carry out an inventory check, as part of the Full Management Fee, and that we would have to pay extra amount for the service.

As a Landlord myself, this is quite the norm because the Inventory ideally should be done by an impartial third party in the event of a dispute.

Despite repeated e-mails this continued by which time new tenants were found and entered the property.

This could be construed as acceptance because the Agent was under a standing instruction and to sign up the tenant on the Landlords' behalf.

When the first payment was received, a fee of £120 was deducted from the rents, for the Tenancy Agreement.

Again, this is the norm. I recently paid £130 as 50% of the Tenancy Agreement for one of my properties.

My friend was somewhat peeved as over the past 4 years, on the original basis and with two sets of the tenants, the last change being 2 ½ years ago, no such fee had been made nor was he advised that there had been a change in the existing arrangements.

This is a question of whether the Landlord was aware or had access to or notified of the Agent's terms and conditions. This could simply be in the form of an email or published on the Agents' website.

In September, a month after the new tenants entered the property, the agency sent a formal Terms of Business which they originally claimed, and later rescinded, had been sent prior to the new tenants moving in but, they subsequently agreed, was never in fact sent.

My friend is totally fed up with the agency and would like to get rid of them but, under the new Terms of Business, which adds in all sorts of additional charges that had been inclusive, he would have to give 12 months notice.

Is he bound by a contract that was presented after the deed was done or does the previous, beneficial, arrangement still hold sway?

The terms and conditions that were induced at a late stage do not appear, from what you say, to be incorporated so the Landlord may be entitled to terminate the contract under any previous terms that have been agreed/incorporated into the original contract.

 

[Penpusher]

I think my friends my gripe is that he is paying a not inconsiderable sum for a service which used to include XX but now only includes xx and that the agent has ignored his request for information, prior to the new tenants entering, which could have given him the opportunity of looking around. There is just no transparency here, the agent has acted unprofessionally and as a result he no longer has faith in them.

Thanks for your comments

 

[Richie N]

Surely they could have got out of the contract when the previous tenancy expired and then went with another agents or found tenants direct.

This is why I never use agents to find tenants

 

[bwglaw]

I think my friends my gripe is that he is paying a not inconsiderable sum for a service which used to include XX but now only includes xx...

Understandably, however, it has been some 2.5 years ago since the Agent was last instructed to find a tenant. I note that your friend had requested information, therefore it should have been made clear to the Agent not to proceed without this information. A tenant cannot be given the keys to the property without the Landlord's consent so your friend must have agreed to the new tenants.

From experience, always be the one in control, not the Agent. Agents I have used in the past have always wanted to run with the new tenants and I make them walk and provide me with what I require. I always request copies of references, question them and where necessary to impose additional conditions. I do not use Agents to manage any of my properties and because of my approach, I have good long-term tenants, which in turn makes management a breeze.

After a few years with one Agent it is often time to move to another.

 

[QuickHomeBuyers]

Depending upon your friend's portfolio size, there are many more lucrative and much more cost effective solutions out there.

 

[Penpusher]

Thanks again for your replies. In answer to Richie N the issue is that it wasn't until AFTER the new tenants had moved that my friend became aware that the goal posts had changed and that the agent was trying to impose the new terms of business.

As it is thanks to your help my friend has now been promised the other £60 outstanding for the tenancy agreement and has been told that the new terms do not apply to him. Sounds as though they realise that they missed the boat this time. I'm sure that they will try again, but this time BEFORE they look for replacement tenants. But I advised my friend to look around next time.

Thanks again

 

[Penpusher]

Depending upon your friend's portfolio size, there are many more lucrative and much more cost effective solutions out there.

My friend only has the one house, it was his former home, but I know that he is interested in using it as security for additional buy-to-let properties. Ones that he could manage himself - no agents!!

 

[QuickHomeBuyers]

My friend only has the one house, it was his former home, but I know that he is interested in using it as security for additional buy-to-let properties. Ones that he could manage himself - no agents!!

So what makes a great BTL property in today's climate?

We all know property prices aren't going up any time soon. Key focus is on the discount and yield achieved.

Happy to have a chat with your friend and see what his goals are.

 

[arcon5]

Even with property prices not on an increase, he has somebody in the property paying his mortgage for him

 

[Richie N]

Thanks again for your replies. In answer to Richie N the issue is that it wasn't until AFTER the new tenants had moved that my friend became aware that the goal posts had changed and that the agent was trying to impose the new terms of business.

As it is thanks to your help my friend has now been promised the other £60 outstanding for the tenancy agreement and has been told that the new terms do not apply to him. Sounds as though they realise that they missed the boat this time. I'm sure that they will try again, but this time BEFORE they look for replacement tenants. But I advised my friend to look around next time.

Thanks again

Definitely. At least it's sorted.

 

[Penpusher]

Latest update - the agents have replied to say that my friend isn't bound by the new agreement and has been refunded the additional fees. It just goes to show, never assume that the other guy knows what they are doing or that they have your best interests at heart. The phrase "Trust No One" comes to mind as I think this particular "X" file is closed. Thanks for all your help.