Penalty charge to terminate contract 3 months after tenant has left?

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    Penalty charge to terminate contract 3 months after tenant has left?

    We have a property which was let via and agent for the past few years. The tenant was served notice and vacated in November. The property has now been vacant for 3 months during refurbishment. Since then, the only thing the agent has been dealing with is a claim via the DPS against the deposit for damage, which is ongoing.

    We have been disappointed with the service from the letting agent over the last year, but especially in the last few months. Since the property has been vacant we have not been approached by the agent to help refurbish or re-market the property.

    We have just started marketing the property via a different letting agent and the original agent has found out. They say that we can’t do that as we are in a contract with them which require 3 months’ notice. They are requesting £170 for us to get out of their contract - based on 3 months’ management at the rate of the previous let.

    Their T’s&C’s do state that 3 months’ notice is required to terminate the contract, but they also state that ‘the landlord cannot dual market the property in the final month of the tenancy’. As we are well out of that period we thought we should be free to market the property elsewhere. Also as the property is not generating an income we can’t see how they can legally request 3 months’ management fees. The agent has now refused to re-market the property themselves as they do not want to dual-market it.

    There don't seem to be any other relevant areas within their terms and conditions. Is anyone able to help clarify what is legally correct and how best to proceed?

    Many Thanks

    #2
    If you are in a contract with someone that requires three month's notice, you need to give them three month's notice.

    If you have broken the agreement by marketing the property with another agent, they can make a claim for any loss that they incur as compensation. Three month's fees is not a loss, however, although they might be able to make a case for any fees they don't receive if the property is let during the notice period.

    Presumably they haven't been receiving fees while the property was untenanted, and there's no reason for them to expect anything until it is.

    The agent definitely can't charge a "penalty charge", as that wouldn't be legal.

    The clause about the "final month of the tenancy" is moot as there's no tenancy at the moment.

    I wouldn't expect much joy with the deposit dispute and you might want to take over that issue.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thanks very much for your reply.


      I think we need clarification of whether we are legally at liberty to market with another agent - certainly that was our understanding as the only clause was about not doing so in the final month of the tenancy. Although I stated in my first post that the agent said that we can't market elsewhere, they didn't directly say that this breaks the contract, just that they are angry that we have chosen to go elsewhere without consulting them first.


      I certainly take your first point about the three month notice period; this is something we had missed when reviewing their terms and conditions before appointing the other agent. But is it legal to send us an invoice for £170 in order to terminate the contract? If it is, then fair enough, we'll pay it and move on, but I get the feeling that they're trying it on with us.


      Regarding the deposit dispute, we have always been told that the letting agent has ownership of the account with the DPS and it has to go through them, that said, we have compiled our own evidence report and have sent that directly to the DPS referring to the case number to ensure our case is adequately represented.

      Many thanks again.

      Comment


        #4
        Whether it's legal for them to invoice you for three month's of fees would depend on the contract (and then whether it's fair).

        The agreement should say when the agent is able to charge fees - mine says fees are charged for transferring rent to me, so I'd say a fee wouldn't be due if the tenant didn't pay rent or (more likely) there wasn't a tenant in a property that month.

        From your first post, the property is currently empty, so I'd assume you haven't been paying the agent fees for a short period anyway.
        They can't invent new fees, but they can charge what you've agreed to.
        So the precise wording of the agreement is where I'd start.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          My apologies I just realised that I never thanked you for your post, it was much appreciated.
          As far as my case is concerned, we looked again at the contract and found no more detail pertaining to our circumstances, we asked the agent to clarity the grounds for the charge with regard to their clauses and fees before we pay, all they said again was that they require 3 months' notice to terminate the contract.
          As far as we're concerned, the notice period is underway and we're not breaking any terms of the contract. If we end up getting another tenant in place before the 3 months is up (which I hope we do!) then that may drive matters to a head.

          Thanks again

          Comment

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