Failure to provide the right to cancel

[DPT57]

DPT57, I appreciate your thoughts but you don't know the full scale of what happened with regards to that tenant so don't jump to conclusions.... I have also seen a tendency from people to assert authority when it's not really necessary.

We can only go on what you post and what you posted in this case suggests that you take offence easily. I think this is a luxury people in business cannot afford. You don't seem to accept that what you were asking the tenant to do was an imposition and it would be quite reasonable for them to indicate the cost to them of accepting it. I have no idea whether there are lots of other reasons to reject this tenant and if there are perhaps you should have said that. On the face of it, you seemed to reject the tenant based on what to many would consider to be a reasonable, if a little cheeky, response from the tenant. I stand by my remarks.

[jpkeates]

Good luck, they sound like a nightmare (although mostly shooting themselves in the foot).

[Byrdewear]

Chances are they'll fail to turn up at the court session and are just doing it for the stress.

I don't think so JPK - this agent is very vindictive and I am 100% sure they will turn up and argue and will even go to appeal if they lose. Very stupid in my view given they are a business and this is something they should easily write off and move on.

[jpkeates]

Chances are they'll fail to turn up at the court session and are just doing it for the stress.

[Byrdewear]

Thanks for that.

You have to read the agreement as a whole, but on the face of it, the Initial Commission fee is not payable. It arises on the commencement of the tenancy and no tenancy has commenced.

The front page of the contract says,
Under the Terms and Conditions, you will be liable to pay (Agency Name deleted) commission fees in respect of the initial period of the tenancy AND ALSO in respect of periods after the end of that initial period where the original tenant introduced by XXX remains in occupation, whether under a new agreement or by the initial agreement being extended or the tenant being allowed to hold-over (all these being “Renewals”).

Of course there is no tenancy period.

Yes, they are hacked off because I complained about them to the Ombudsman (TPO) - there was no compensation but there were elements that TPO pointed out including the fact that this was not the first time this agency was reminded about providing cancellation rights. They tried to take revenge by serving at my old address thinking that they could enforce default judgement - this is despite, I was explicitly instructing them of my new address to serve - fortunately, I had a redirect so got hold of the service and defended, counterclaimed and applied for a strike-out for defective service.
I agree, they are nuts too.

[jpkeates]

Thanks for that.

You have to read the agreement as a whole, but on the face of it, the Initial Commission fee is not payable. It arises on the commencement of the tenancy and no tenancy has commenced.

The second clause depends on the definition of a Tenant (is it capitalised differently in the two clauses in the original?). If there's no tenancy, there can't be a tenant, and the agent can't claim to have found one - what they have found is someone who wanted to be a tenant, unless their definition of Tenant includes someone who wants to be a tenant.

The second clause isn't a termination clause at all - the second sentence doesn't relate to termination and the first envisages the cancellation of the contract if the landlord withdraws their instruction before anything has happened, rather than how it should be terminated having operated for a period.

So if that's all there is about termination, the agreement is defective as you asserted above.

I'd say they're seriously hacked off (or nuts) to be suing you on the basis of those terms of the agreement.

[Byrdewear]

Hi JPK- it was signed remotely. The contract says,
“The Initial Commission fee is payable on the commencement of the tenancy and charged as a percentage of the total annual rental amount of the agreed term as specified in the tenancy agreement”

The agent is relying on the termination clause that says, This Agreement will end immediately if the Landlord withdraws their instruction before the Agent finds a Tenant. Once the Agent finds a tenant who meets the criteria agreed which was agreed with the Landlord, the Landlord must pay the Agent the agreed commission.

They're not suing for breach of contract- that was never alleged; instead, they're suing in the belief that their services has been completed in line with that clause.

The contention is whether that clause is enforceable or not? Criteria wasn't agreed in writing.

Finally, the agent is asking to pay more than what the contractual amount is i.e. letting and management fee for the whole year is 10%+vat (a negotiated rate) but he's arguing that the standard rate 12% +vat is payable, which escapes me as to why. Nothing in the contract that says one has to pay a standard rate for a breach of contract or otherwise. So, if we had gone ahead with this tenant, they would've had to offer me 12months of service (and I would've paid less) than what they're claiming- ridiculous! In fact, the contract lists about 20different line items that they were meant to offer as part of the contract (appraisal, tenant find, drafting agreement etc) and they performed about 4 albeit unsatisfactorily.

[jpkeates]

Did you sign the agreement with the agent in their office or remotely?

Your defence should be more simple, though.
The agent is (presumably) suing you for a loss arising from your breach of contract.
They're entitled to recover their reasonable foreseeable losses, but I don't think the income that they didn't receive is such a loss.

It would help if you could quote the actual contractual text relating to what the fee is, how it is worked out and what triggers it.
For example, many agent's fee's are expressed as a percentage of rent due, and if there is no tenancy agreement, there is no rent due.

[Byrdewear]

I think the Agent has a point! Tenants can and do negotiate rent reductions all the time. This is a business! They were also quite right that storing your items in their loft was a detriment to their tenancy and has a cost. How much of a detriment and what the value would be is a negotiation, but it sounds like you took umbridge and cut them off before that could happen. Very foolish in my view if they were otherwise good tenants. The Agent has acted in good faith and whether they have a legal case or not, I can completely understand their frustration. They must think they have a good case or they wouldn't have let it go this far.

DPT57, I appreciate your thoughts but you don't know the full scale of what happened with regards to that tenant so don't jump to conclusions. My question as in the original post was regards to the specific point- not providing the right to cancel is an offence (probably civil but some say criminal) so that the cancellation period is extended to 12months with no liability (full or in part) for the consumer. This is what I've read in CCR 2013 (consumer contracts regulations 2013) and was hoping that some legally well versed folk here might offer some insight.
Of course, the agent thinks it they have a case. As it happens, I've applied for a strike-out and it's due to be heard in a couple of months. I'll update afterwards.
I must say that there are plenty of experienced folk this forum and I find it extremely valuable however I have also seen a tendency from people to assert authority when it's not really necessary. Yes, I'm an inexperienced LL but it doesn't mean I can't read and interpret legal instruments or how the tenancy negotiation works. Without going into too much detail, I don't see why a tenant suddenly would decide to view the property for the 3rd time on the day of signing the agreement having known all the details beforehand even prior to the second viewing- what does it say about transparency? Someone like him would've easily negotiated a reduction in rent with this pandemic regardless of whether he was affected or not. I have heard plenty of horror stories on this forum and elsewhere to be sceptical. I have maintained a mindset that an empty property is better than one with a wrong tenant.
We now have tenants who have always paid rent on time, I even slightly increased it recently on renewal and they look after the house well.

Thanks for your wisdom

[DPT57]

(Iwe left some belongings in the attic which was made clear to him before he agreed to pay the deposit) and alluded that he may bargain for 50GBP less rent (as storing these items somewhere else might cost 50per month). At that point, having already wasted two weeks, I said NO in writing - I told the agent that I considered him to be non-transparent and therefore rejecting him.

I think the Agent has a point! Tenants can and do negotiate rent reductions all the time. This is a business! They were also quite right that storing your items in their loft was a detriment to their tenancy and has a cost. How much of a detriment and what the value would be is a negotiation, but it sounds like you took umbridge and cut them off before that could happen. Very foolish in my view if they were otherwise good tenants. The Agent has acted in good faith and whether they have a legal case or not, I can completely understand their frustration. They must think they have a good case or they wouldn't have let it go this far.

[Byrdewear]

It may not be 100% relevant; I was pointing out to the fact that in these circumstances (as happened in my case), they only say that the landlord maybe liable for the cost of pursuing the references. They don't of course say 'only' the cost of references.

I agree with you on the point of TPO though - complete arses and out there to support their fellow criminals. The redress schemes are partly the reason why we have rogue agents. I believe there is a proposed overhaul to come up with a more stringent Code where any breaches will lead to penalties. Right now, there are no penalties for the agent for breaching the Code whether TPO or PRS. For example, TPO code says explicitly about 'right to cancel' being included in the contract - I complained to the TPO - no action on the agent. They even went onto say that this was not the first time that lack of cancellation clause in this particular agent's contract has been brought to their attention.
We need to under that TPO (and PRS) are private organizations and funded largely (perhaps solely) by the agents membership. When there are competing redress schemes, nothing stops the agent to go from one to the other in case of harsh treatment from one.
Oh well,.....

[AndrewDod]

Interested to know how the property ombudsman defines "has failed referencing" - it is a non-concept. It is a nonsense from the Ombusman -- holding deposit is refunded based on the criteria used for its collection (which can include a bunch of stuff like bank statements, immigration status, whatever other referencing L might do, and lies on application). And the converse is not true either - if "referencing" conforms exactly to what T filled in on application form it would be inappropriate not to refund the deposit even if that is deemed a "fail".

This is the Ombudsmans talking out of their bums.

But this is not 100% relevant to the matter at hand.

[Byrdewear]

Also, the Property Ombudsman's code (which the agent has signed up to) has this clause:

Where an offer has been made to a landlord and the landlord declines the tenancy other than because the tenant has failed referencing, the landlord should be advised that the tenant’s holding deposit will be refunded in full to the tenant (see 9j below) and that the landlord may be liable for costs incurred by the agent in pursuing the references.

[Byrdewear]

No, nothing was agreed in writing. I wanted a trustworthy and a transparent family. The tenant in question viewed the property twice before the holding deposit was taken. Then the reference checks were done and came back satisfactory. On the day/day before the tenancy agreement was due to be signed, the tenant wanted a 3rd viewing for a specific aspect (Iwe left some belongings in the attic which was made clear to him before he agreed to pay the deposit) and alluded that he may bargain for 50GBP less rent (as storing these items somewhere else might cost 50per month). At that point, having already wasted two weeks, I said NO in writing - I told the agent that I considered him to be non-transparent and therefore rejecting him.

[AndrewDod]

Well do they have the set of criteria you agreed and signed up to? Why exactly did the tenant they find not proceed?