Open ended tie in clause - legal?

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    Open ended tie in clause - legal?

    I have just discovered that (stupidly) as a first time landlord I've signed a lettings contact with my agent that states I have to give 3 months notice to terminate the use of his services (fair enough) AND that I then have to continue to pay for his services until the end of the tenancy, including extensions or renewals. Is this clause legal?
    I introduced my tenant (he was the friend of friends) but wanted my property managed as I've moved abroad. I feel I'm being overcharged for services rendered ( the inventory first and now numerous 'small' jobs that the contact states he doesn't have to notify me of in advance as they're all under £100).
    Sadly, I haven't trusted his behaviour since the day I handed over the keys - he shouted at me and said I was treating him like a child when I said I hadn't been happy with his communication in the run up to the start of the first tenancy - but thought I'd be able to change agents at a later date if things didn't improve.
    I'm kicking myself for signing the contract with this clause...I can't believe I missed it but am hoping it's simply not legal.
    Any suggestions for a way forward much appreciated.

    #2
    Write in line with what agreement says (keep copy & proof of service) tomorrow giving notice. Instruct tenant, in writing, to pay you & communicate only with you from now one. Demand copies if all paperwork & transfer of deposit to you - & protect it.

    Find out what redress scheme he is in & formally enquire if shouting at clients is an approved practice.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Could you let us know
      1) was this tie in made clear verbally before contracts were signed; or
      2) was this tie-in made clear on the contract - or was it hidden in the small print
      3) were you given adequate time to read the contract

      Comment


        #4
        The 3 month cancellation period is fairly standard Term of Business for MA,but itshouldbe equitable ie MA has to give you 3 months Notice to cancel Contract with you.
        The other condition is fairly standard but less supportable as it relates to commission payable for 'finding' T. It is not 'open ended as you suggest, it only pertains to current T.
        As you are an ex-pat LL UK Law requires you to provide T with UK address for 'service of Notices' and,wiithout HMRC dispensation, any UK income transferred off-shore, should have tax deducted at source.
        Any legalaction against MA will prob require your attendance, or that of a UK Solicitor./

        Comment


          #5
          Hi
          No, this clause was not discussed verbally.
          However, its not in small print - as I say, I just missed it. How I managed to do so is beyond me - in my defence I had A LOT going on at the time.
          Regardless it seems wholly unreasonable that if I were to give 3 months notice to terminate our agreement, I would still be paying him for the next 10 ( or indefinite) years, should the tenant stay. That seems unreasonable even if he had introduced the tenant. If an employee were sacked ( or even made redundant), an employer wouldn't have to pay them beyond the end of their employment. Thats why I'm hoping it's not legal.

          You seem to know about these things so do you also know if I can find out if he's a member of a redress scheme ( I believe there are 3) without having to ask him? I'm also aware that I should have found out a lot more before taking him on...he was recommended by a trusted friend ( he's not her agent!!) so I didn't look as closely as I should have.
          Many thanks!

          Comment


            #6
            Thank you! It's very tempting to do exactly what you suggest! However, I want to tread carefully here and find out if the contract we have is legally binding or not before doing anything rash!

            Comment


              #7
              Thank you...
              I'm aware I have to pay tax but the UK has a reciprocal tax agreement with the country I've moved to and I'm only supposed to pay tax in one country so I'm currently attending to clarify where I should pay what.
              Very useful to know that I need a UK address to supply the tenant with ( I would most probably find another agent).
              The 3 months in this case is not reciprocal - the clauses pertaining to the agent simply state 14 days notice to be given at the end of a tenancy or in the case of breach of terms and conditions. And 2 clauses that state that the agent can cancel without notice if the owner demonstrates ' unreasonable behaviour'!
              I look at this now and a lot of it seems very much in the agents favour.

              Comment


                #8
                Originally posted by F Kay View Post
                do you also know if I can find out if he's a member of a redress scheme ( I believe there are 3) without having to ask him?!
                Using the link below, you will find the 3 redress schemes. Hope it helps.

                http://forums.moneysavingexpert.com/...34&postcount=8

                Comment


                  #9
                  Originally posted by F Kay View Post
                  Thank you...
                  I'm aware I have to pay tax but the UK has a reciprocal tax agreement with the country I've moved to and I'm only supposed to pay tax in one country so I'm currently attending to clarify where I should pay what.
                  Very useful to know that I need a UK address to supply the tenant with ( I would most probably find another agent).
                  The U.K. Rules on income tax for landlords operate outside the usual reciprocal tax arrangement. You may end up being able to claim back tax you've paid "twice" but that would be unusual (in fact, outside my experience entirely).
                  The need for an address is more than "useful", it makes a number of other things impossible if you don't supply it (the tenant can withhold rent for example).

                  The exact wording of the clause may be helpful to you. If you "extend" or supersede a tenancy agreement, it can actually be a new tenancy. It isn't necessarily the case that one tenancy continues with different agreements.
                  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


                    #10
                    I asked earlier about how the condition was made clear to you and it would appear it was not 'hidden' from you. Now the courts can help you if you enter into a contract that is 'unfair', but not if you simply make a bad decision - whatever the personal reasons.

                    I'll give you a few things to google in a moment, but on your contract, was the term presented under a specific heading like "Special Terms", "Termination" or was it just in "Terms of Business"

                    In reality, the clause is not un-ending, it is your choice whether you evict the tenant and stop paying fees or to keep the tenant that they found and keep paying fees. I am not saying this is overtly fair, but it is the contract you agreed.

                    Google
                    OFT v Foxtons
                    UTCCR (Unfair terms in consumer contract regulations)
                    HMRC non-resident landlords

                    Comment


                      #11
                      "I have to give 3 months notice to terminate the use of his services (fair enough) AND that I then have to continue to pay for his services until the end of the tenancy, including extensions or renewals. Is this clause legal?"

                      I do not see how it can possibly be. There is a contradiction: you can terminate the use of his sevices, but still have to pay for them. How can you be made to pay for a service you do not receive? The provision is a fetter on the right to terminate. If you have to keep on paying there is no point in terminating the contract.

                      If you had a contract with a grower to supply you with so many potatoes per month and the contract said you could terminate it on three months' notice but that after termination you still had to keep paying for the potatoes can you imagine a judge saying you had to keep paying for potatoes you do not get?

                      Comment

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