Selling flat to existing tenant ( currently managed by agent )

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Selling flat to existing tenant ( currently managed by agent )

    Hello all

    I was wondering if anyone can help me with a couple of questions.

    I currently let a flat via an AST. This is managed ( rent collection only ) by a letting agency. The AST expires on the 5th November 2010. I have spoken directly to the tenant about whether they are interested in buying the property. They are interested in doing this and have suggested not using an agent to save money.

    My questions are:

    1. If I sell privately to the tenant WITHOUT any agent ( i.e. do not use the letting agent, who also does sales, nor any other agent ) can the current letting agent charge me any fees?

    2. I cannot sell the property until January 2011. I have spoken to the letting agent about the tenant going onto a month by month agreement. They have told me I cannot simply set up a private AST and have to go via them. They are going to charge me full fees. From what I have read on the foxtons case, unless this is clear in the contract, I believe they may not be able to do this? Should I ask them to show me where in the contract is says that I will be charged for this?

    Thanks in advance!

    Cheers, Davwardo

    #2
    1. This depends on the precise wording of the Agency Agreement into which you entered. Read it. Unless fees for such sale are reserved, do not pay.

    2. They are talking nonsense. When fixed-term AST expires but T stays, it becomes (automatically, on the very next day) a Statutory Periodic Tenancy. If fixed-term rent was due monthly, the SPT is monthly too. They can claim further fees (on SPT) only if the precise wording of the Agency Agreement into which you entered says so.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Thanks Jeffrey - I will be having a fun evening reading through all of the documentation!

      Comment


        #4
        Originally posted by jeffrey View Post
        1. This depends on the precise wording of the Agency Agreement into which you entered. Read it. Unless fees for such sale are reserved, do not pay.
        Even if it is reserved (selling to the tenant) the wording is most unlikely to comply with the Estate Agents Act 1979 S.18 (Provision of Information Regulations) 1991 under which property sales are governed concerning the wording that must be used in order for the 'earning event' to be determined, so can almost certainly be safely ignored.
        The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

        Comment


          #5
          Yes, in most cases.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Originally posted by Paul_f View Post
            Even if it is reserved (selling to the tenant) the wording is most unlikely to comply with the Estate Agents Act 1979 S.18 (Provision of Information Regulations) 1991 under which property sales are governed concerning the wording that must be used in order for the 'earning event' to be determined, so can almost certainly be safely ignored.
            Paul, out of interest where would one find this wording?

            Comment


              #7
              Originally posted by Poppy35 View Post
              Paul, out of interest where would one find this wording?
              If you look at the 1991 PoI Regulations it tells you exactly what an estate agent must inform his client before taking instructions when selling their property. There is a lot of contention because agents are told that they must use the term 'remuneration' rather then commission. I've been in court on two occasions in support of agents where the judge questioned the exact definition of what 'remuneration' was supposed to represent; I actually agreed with what he said, as commission is far more definitive. The agents each won their case, but not before a bit of debate and a stern warning from the judge to use more consumer friendly terms; agents however are tied by the PoI wording. There is nothing to prevent an agent adding a definition of remuneration to clarify the point, and as the regs. were poorly worded in the first place, it would be prudent to do so if a challenge in court were to be made by a defendent with a bit of knowledge.

              If letting agents just put some clause into their ToB trying to snare landlords into paying commission if selling to a tenant, then the wording won't usually comply as it fails the PoI test. Property sales comes under the Estate Act 1979 whereas lettings has nothing to do with it.
              Landlords normally instruct agents to let a property, not to sell it, so if they decide to sell later (to the tenant) then there must be a completely new contract that the landlord willingly enters into.
              The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

              Comment


                #8
                Thanks Paul

                Comment


                  #9
                  Originally posted by Paul_f View Post
                  If you look at the 1991 PoI Regulations it tells you exactly what an estate agent must inform his client before taking instructions when selling their property. There is a lot of contention because agents are told that they must use the term 'remuneration' rather then commission. I've been in court on two occasions in support of agents where the judge questioned the exact definition of what 'remuneration' was supposed to represent; I actually agreed with what he said, as commission is far more definitive. The agents each won their case, but not before a bit of debate and a stern warning from the judge to use more consumer friendly terms; agents however are tied by the PoI wording. There is nothing to prevent an agent adding a definition of remuneration to clarify the point, and as the regs. were poorly worded in the first place, it would be prudent to do so if a challenge in court were to be made by a defendent with a bit of knowledge.

                  If letting agents just put some clause into their ToB trying to snare landlords into paying commission if selling to a tenant, then the wording won't usually comply as it fails the PoI test. Property sales comes under the Estate Act 1979 whereas lettings has nothing to do with it.
                  Landlords normally instruct agents to let a property, not to sell it, so if they decide to sell later (to the tenant) then there must be a completely new contract that the landlord willingly enters into.
                  Thanks for this. So in essence we have wording in our T of B about selling to a tenant and a fee being due. If the tenant were to ask us if the L wanted to sell and the L was happy to sell to them we would have to provide L with a separate contract for us to deal with the sale and thus receive our renumeration/commission?

                  This has happened in the past however all the Landlords have been more than happy to pay our fee. We still followed the whole process through with solicitors etc.

                  Thanks for your help.

                  Comment


                    #10
                    Letting agents whose sole business is letting need to bear in mind that if they engage in estate agency that they will be covered by the Estate Agents Act 1979.

                    Comment


                      #11
                      so for example, if we had a business which was ABC estate Agents and a business ABC Lettings and some of the partners of the lettings business were partners in the estate agents would that cover our obligations?

                      Comment


                        #12
                        Originally posted by Poppy35 View Post
                        so for example, if we had a business which was ABC estate Agents and a business ABC Lettings and some of the partners of the lettings business were partners in the estate agents would that cover our obligations?
                        Not sure I follow you.

                        Comment


                          #13
                          Originally posted by Lawcruncher View Post
                          Letting agents whose sole business is letting need to bear in mind that if they engage in estate agency that they will be covered by the Estate Agents Act 1979.
                          I think you mean that they must comply with the Estate Agents Act 1979 as they won't otherwise be covered as they would need to register with an indpendent redress scheme to conduct sales.
                          The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                          Comment

                          Latest Activity

                          Collapse

                          Working...
                          X