Hefty Agency fee

[spence333]

HI all, I have recently bought a property and continued with the existing Agency management. I would now like to break away from the agency so I have given them the 2 months notice stipulated in the management contract. This also coincides with the end of the 12 month AST which then goes into a rolling contract.

The agency are wanting a hefty sum to break the contract as I have not terminated the AST, only the management contract. This is a condition of the contract.

My question is this - would you give the tenants the 2 months notice to coincide with the end of the management (including one month’s rolling) but at the same time provide the tenants with a new AST to start when the agency version finishes??

I have already spoken with the tenants direct and they would like to stay for another 12 months minimum.

Thanks everyone.

[jpkeates]

You can't terminate the AST without retaking possession of the property and ending the tenancy.
Giving notice as a landlord has no effect without a court order and, unless the agency contract is useless, that won't be enough.

Letting agents need to make money and their agreements are usually specifically aimed at preventing landlords using their service to find tenants and then getting rid of the agent when they find a great long terms tenant who seems to need little management.
The agent's business model is usually that they make a small amount of money for a long a term as possible with the decent tenants subsidising the pain in the bum ones that no one wants.

So, yes, they'll charge you to change that model.

It's possible the charge is so great as to be unfair, but you'd need a court to decide that.

[MdeB]

Did you sign an agreement with the agency, when you bought the property?

[Lawcruncher]

Please set out the wording of the condition.

[spence333]

Did you sign an agreement with the agency, when you bought the property?

Yes I did.

[spence333]

Please set out the wording of the condition.

'These Terms cannot be terminated by the Landlord during the period of an AST entered into by a Tenant. If the Landlord wishes ECMML to cease providing the Management Service, it shall provide ECMML with written notice (to be issued no later than two (2) months prior to the date the AST is to conclude and the Tenant is to vacate the Property), otherwise these Terms shall automatically re-new for each new AST. If the landlord ends the management contract in contradiction with clause 23.2 then a termination fee of £1250 + VAT will become due immediately.'