Landlord bears unlimited liability to the Letting Agency

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    Landlord bears unlimited liability to the Letting Agency

    My letting agency issued a new business terms & conditions. There is a landlord liability clause in it, where the landlord has to indemnify the letting agency with unlimited liability. Is this common? Appreciate any feedback.

    "The Landlord agrees to indemnify (and keep The Company indemnified)and be liable to pay to The Company, on demand, all reasonable costs,charges or losses sustained or incurred by The Company (including, without limitation, any direct, indirect or consequential losses, loss of profit and loss of reputation, loss or damage to property and those arising from injury to or death of any person and loss of opportunity to deploy resources elsewhere) arising
    either directly or indirectly from:
    (a) the letting of the Property by The Company;
    (b) The Company’s appointment as the Landlords agent;
    (c) the occupation of the Property by the Tenant; or
    (d) the Landlord’s fraud, negligence, failure to perform or delay in the performance of any of its obligations under the Contract or any other obligations (legal or otherwise and including but not limited to any tax related obligation) imposed on the Landlord as a result of his ownership of the Property and/or his position as a Landlord generally, subject to The Company confirming such costs, charges and losses to the Landlord in writing."

    #2
    obviously you told them to roll it up very tight and poke it where the sun don't shine.

    Comment


      #3
      Originally posted by chloe_1775 View Post
      obviously you told them to roll it up very tight and poke it where the sun don't shine.
      Such a clause is common in agency agreements and there is nothiung wrong with it in principle. However, it needs to be drafted carefully to ensure it cannot be challenged as an unfair clause where the LL is a consumer.

      In this case (and assuming you are such a LL) it is wide open to challenge. It is not in plain English, and there is no carve out for costs or liability arising from the agent's own fraud, negligence or breach of the agreement. It is also not written in plain English.

      Comment


        #4
        I've got a clause in our agreement that's not dissimilar to protect us in the event the landlord does something very silly but I think this clause is overkill. Sub clauses c) and d) are fairly standard but the other two seem a bit harsh

        Agents are engaged by landlords to find a tenant; they (hopefully) reference that tenant in a robust enough way that they are able to present a 'picture' of the tenant to the landlord to make an informed decision as to whether they want that particular tenant. If the landlord says yes, he can't later come back on the agent if it subsequently turns out the tenant is a nominee for the worst tenant in the world,the agent can't vouch for the future perfomance of the tenant nor can the landlord hold the agent responsible for it - UNLESS it could be proved that the agent failed in his duty to the landlord somehow i.e. didn't carry out references, failed to use due diligence
        My advice is not based on formal legal training but experience gained in 20+ years in the letting industry.

        Comment


          #5
          For more than 15 years, all the previous 5 agencies did not have this kind of liability clause in the business terms and conditions. The current agency bought over the last one and hence my letting is transferred.

          I have also done a bit of research on the Internet and none of them have such a harsh liability clause in them.

          Much appreciate if some landlords can share their liability clause in their terms and conditions agreement with their agencies.

          Comment


            #6
            Originally posted by Nerice Wong View Post
            The current agency bought over the last one and hence my letting is transferred.
            You do not have to accept their new terms. You have (presumably) already agreed terms with the agent. They cannot change them unilaterally unless there is a term in your existing agency agreement allowing them to.

            The only other circumstance when you may have to agree to their new terms is if your current tenant moves out and you want them to find a new one for you, because that may signify the end of the term of the existing agreement.

            Comment


              #7
              Agreed.

              Write and tell them they have no right to change the terms and that you are only prepared to do business with them on the terms you agreed with their predecessors and if that is not acceptable they are at liberty to terminate the agreement in accordance with the termination provisions.

              Comment


                #8
                Thanks for all your helpful replies. They have now confirmed that the old T&C is still working (as you indicated), which does not have the unlimited liability in it.
                It's good for now. Until the current tenant moves out, I may be asked to sign their new T&C!!! Luckily, the current tenant is good and hopefully I can keep them as long as possible.

                Comment


                  #9
                  Originally posted by Lawcruncher View Post
                  Agreed.

                  Write and tell them they have no right to change the terms and that you are only prepared to do business with them on the terms you agreed with their predecessors and if that is not acceptable they are at liberty to terminate the agreement in accordance with the termination provisions.
                  Unless there is a clause within the current agreement that allows the agent to vary the terms giving "reasonable notice". I always had this in mine so that I could set fees at a level that made it a viable proposition. Excessively demanding and unwarranted awkward landlords were asked to pay more, and good landlords less!

                  Of course they don't have to agree to the revised terms but I didn't lose any business when fees were increased.
                  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

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