I think we've been conned by the new agent

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    I think we've been conned by the new agent

    Hi everyone, I'm in a bit of a mess.

    I started to talk to a new business manager "W" from a potential new agent late December, because our agent refuses to deal with HMO licensed properties, and our property now must be licensed according to new local laws. The new business manager was very nice and knowledgable, she said that her agent could also inherit the existing tenancy without extra cost, her word was: "you'll pay exactly the same as you are paying to your agent now." We told her that two of our tenants have paid their rent for the whole year, because they couldn't pass the credit check. She said: "we will take 8% of what we receive into our account." After we signed the contract, they advertised our property for 2020-2021 academic year, and we're waiting for the proposed tenant references / credit checks at the moment.

    Last week, the letting manager of this new agent emailed us to say that because they will manage the whole tenancy, although they only receive half of the rent, they will charge us 16% + VAT on the rent they receive monthly, instead of 8%+VAT of full management fee. We emailed her back and explained what has been agreed. The new business manager "W" called us back and said there has been a misunderstanding, she said getting the whole year rent from the tenant is illegal, and she has to charge us the 8% of the whole rent. I asked her why didn't she tell us before? It is the first time we heard that collecting the rent for the whole year was illegal (our previous agent did this without us knowing). Incidentally, if this is the case then why didn't she refuse to take over the existing tenancy. And I also reminded her of the terms she stated, she apologised and said that she had made a mistake. I said to her that the previous agent has already taken the management fee from the two tenants who paid us for the whole year, and if you told us that we'd be double charged, we'd stay with the existing agent for the remainder of the current tenancy. She then said she'd get authority to solve this problem. A week later, I called her office today, and was told that she is no longer works there!

    This was a shock, I mean she was the only reason this agent got our business. Another manager emailed us this afternoon and restated that they will charge 16%+VAT of what they receive. I don't know what to do now. I emailed her back by explaining the situation and said that this is not a misunderstanding, and we're not paying for "the mistake" or "the mis-sold contract" your staff made.

    From our point of view, not only we potentially will pay over £1000 more for the remaining tenancy, but also our trust toward with this agent has lost, how can we believe whatever they say from this point forward? And there is no relationship without the initial manager who got us to sign the contract. Further more, we feel that we've been conned.

    I then checked the terms of business that we signed, and found there is no exit without cost us a lot of money: 1. they can take up to £180 per tenant if we decide to dissolve the instruction with them before the new tenancy start, and there are 5 tenants, which means if we want to leave them now, we would have to pay them £900; 2. they would still take their commission monthly with the same tenancy, even we are no longer their client.

    What should we do? Is this mis-sold contract, if so surely this contract should be invalid?


    #2
    Regardless that W has now left, the undertakings that she made about the agreement are still valid.

    Does the agreement say anything about the agency being able to vary their fees at all?
    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
      Hi jpkeates, thanks for the reply. The problem is that the agent only consider it as a "misunderstanding" from our part, we haven't got any written evidence, because we only asked W to explain on how much the agent would take commission on the existing tenancy. She may give us a deal or she may not, but the wrong information was given to us by her, which lead us to make this move that would potentially cost us over £1000 more than we should be paying.

      I checked the terms of business, there is no mention of the agency can vary their fees, but they can terminate the contract and still charge commission.

      Comment


        #4
        Whether or not the agreement says that they can end the agreement and still charge, they should be referred to the Foxtons case, which pretty much says that they can't.
        Agents can't charge fees for work they won't do.

        If the wrong information was given to you, that's the agent's problem.

        The most sensible solution is that, if the agent isn't happy with the deal that they have entered into - which I can understand, they should agree to end it.
        But they can't simply vary the terms to make the agreement acceptable.

        It doesn't sound like there's a realistic chance of you getting the service you want from the agency at the price you want, so I think the best option is to end the relationship.

        I don't know what would persuade the agency that they're wrong - other than suggesting that they take legal advice before going any further, because you won't be doing business with them or paying them anything and, if you incur legal fees yourself, you;ll expect them to compensate you.

        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
          Hi jpkeates, thanks for your advice. Could the agent still take commission from the new tenancy they found for us if WE terminate the contract (it's unlikely they'd end the contract willingly)? Or can we declare this whole contract is being valid because they mis-lead us, the mutual trust is gone?

          This contract covers two tenancies:

          1. the existing tenancy, this is the part we have major problem with that caused us to lose all trust towards them;

          2. the new tenancy: This agent has advertised our property for 2020-2021 academic year (new tenancy starts from September 2020), and they have found the tenants, and they're doing their credit check with Good Lords at the moment. According to the terms of business we signed (there should also be £300+VAT set up fee in front):

          If we have the tenants they found for us, even we terminate the contract, they can still take commission until the end of this tenancy;

          If we don't have the tenants they found for us and terminate the contract, the agent "can take up to £180 per tenant", times 5 tenants, that's £900+VAT.


          I don't think it's fair for us to pay more than the basic cost for them in finding new tenancy if we terminate the contract.

          Many thanks

          Comment


            #6
            I don't think you can have it both ways.
            If you end the relationship, you would probably have to forgo the tenants they have found for you, you can't change the terms of the agreement unilaterally either.

            While I appreciate that you feel that all trust has gone, it looks from outside (well to me anyway) that there's a single point of dispute, the fee for the two tenants who have paid in advance.
            You should be able to rely on the word of the person with whom you made the original agreement and, from what you have said, there's no mechanism for the agent to enforce what they are proposing to charge.

            So I think the bottom line is that you need to be prepared to walk away entirely or the agent needs to compromise on the fee.
            Or you find some middle ground where you pay slightly more for the current tenancy and the agent agrees to accept that lower fee.
            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


              #7
              Hi jkpeates, I didn't mean that I want to have both ways, I meant even if I walk away without the tenants they found, according to the terms of business, they could charge me £180 per tenant, and there will be £900 because there are 5 tenants.

              The new agent repeatedly states that they will charge me 16%+VAT on the two tenants who are paying monthly, even though they knew what's being said and promised.

              I would love to walk away entirely, my question is: would they let us leave without charging us all those money they states in the terms of business?

              Many thanks

              Comment


                #8
                Essentially they'd have to sue you for it and win unless you pay it.

                At this point I think a sensible solution might be a face to face meeting to try and resolve the issues.
                This is a business, you are a customer and the relationship is worth something to both of you, but mostly to them - because it's what they do far a living.
                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


                  #9
                  If your original agents are refusing to continue the management of the HMO then you may want to ask them to reimburse the fees they have taken in advance.

                  Comment


                    #10
                    I'd like to know where I stand before I talk to them, and thanks for your advise, jkpeates. I am a bit worried because they are not talking to me at all, rather than repeatedly state what I need to pay in emails. I asked them to call me and said we need to talk, but nobody calls.

                    Comment


                      #11
                      Kape65,

                      Hi, thanks for your reply. The original agent doesn't deal with licensed HMO, which is 5 or more sharers. At the moment, our property is rented out for 4 sharers, and it will be rented out for 5 from September 2020. We didn't have to move the existing tenancy to the new agent, we decided to move because we thought could solve the whole agent thing once for all without extra cost. The original agent has collected the rent from the two tenants who paid for the whole year at the beginning of the tenancy, and pass the rent to us, minus the 6%+VAT of commission.

                      Many thanks

                      Comment


                        #12
                        Try and find out who the boss is and try and arrange an appointment.

                        Agents have to belong to a redress scheme with a complaints procedure, and I'd try the approach that you'd rather resolve it amicably rather than formally complain or involve solicitors.
                        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


                          #13
                          Yeah, I asked them to ask the person who has the authority on this issue to give me a call. I'll give another 2 days and then I will lodge a formal complain. Thank you for your advice and support. I will keep you updated.

                          Comment


                            #14
                            Good luck.
                            I always find it strange when people aren't even attempting to resolve an issue.

                            Even if they're certain that they're right and have no intention of changing their position, where's the harm in sitting down and talking everything through with you?
                            It's a business, this won't be the first or last time there's a problem with something someone agreed.
                            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


                              #15
                              Thank you very much, and I totally agree with you. I've seen it before too: because people were being stubborn, it ended up costing them hundreds thousands of pounds more in the end.

                              I am a lot calmer than last night, thanks to you, so when I talk to them, I'll be calm and sensible.

                              Comment

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