Agents Taking Landlord's deposit

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    Agents Taking Landlord's deposit

    as a landlord, I have encountered a difficult situation where I need your advice.


    1. I use agent to find a corporate tenant

    2. with still 12 months left, the tenant informs that he will leave the country in 20 days. but the agent want the tenant to pay penalty to them first.

    3. the agent keeps saying it is not a proper notice as long as the tenant has not paid penalty. So i cannot market the property to mitigate the loss. otherwise i have to pay the penalty

    4. the agent says i could not market the property even after the tenant leaves cos they can come back at any time.


    well this is absurd.
    I am wondering what evidence is required to say it is tenant to break the contract.
    under what scenarios can landlord start marketing my property to mitigate the loss?

    #2
    If there is 12 months of a fixed term left, there is no need to mitigate your loss.
    Property law is not the same as contract law,

    However, it is very unlikely that a penalty fee is appropriate unless it is part of the tenancy agreement.
    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


      #3
      Is corporate tenant named (as tenant) as a company or as the human who was occupying? (1st sort won't be AST).

      You need your tenant to sign a deed of surrender on such terms as you are happy with after having returned keys.
      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


        #4
        Hi jpkeate

        what do you mean when you say If there is 12 months of a fixed term left, there is no need to mitigate your loss.
        the tenant is leaving and not paying rent. I will suffer a loss if i leave it empty

        yes, contract says tenant need to pay penalty when he wants to terminate early. my question is how i can prove tenant want to break so the penalty is not for me to pay

        Comment


          #5
          Fire your agents and then sort it out between you and the tenant. Any penalty they're yakking on about is probably unenforceable anyway.

          Isn't it probably easier to just get the tenant to sign a deed of surrender as suggested above, he hands back the keys and then you re-market, without the inteference of a useless estate agent?

          If the guy is leaving the country you're very unlikely to get anything from him in the sense of rent, or be able to chase him for it.

          Comment


            #6
            Are we talking about inadequate T Notice (NTQ), 2 months Penalty in lieu of Notice? Is it even an AST if a Corporate T?
            What about 'Corporate Image' for T?

            Comment


              #7
              It looks like what we have here is a right to break the exercise of which is subject to paying a fixed sum. There is nothing intrinsically unfair in that and it is not unusual in commercial leases. The consumer legislation that may make the term unfair does not apply as the tenant is not an individual.

              If the terms of the break clause require payment of money then the break is not validly exercised if the money is not paid when it is required to be paid. Since the payment is for the landlord's benefit it would seem that he ought to be able to waive payment if he is content to accept the notice, though the tenant could probably withdraw the notice if he does so before the landlord signifies acceptance.

              We do though need clarification as to exactly what the notice was and what the OP wants.

              Comment


                #8
                Hi thanks for all the reply

                it is residential use only though it is corporate tenant.
                yes, he did not give sufficient notice, and he does not want to pay penalty (due to agent),
                I only want to market it before he leaves. but agent keeps saying he had not officially broke the contract yet.

                so i want to know how to prove he is breaking contract ( when he leaves? or informing he is leaving?)
                when i can relet to others

                Comment


                  #9
                  I think you need some legal advice.

                  If the tenant has some of he fixed term remaining, legally they can't just end the agreement.
                  As a practical matter if they are leaving the country and you don't think any debt will be collectible, you need to agree a surrender (which the tenant may not want to do).

                  If they leave and the formalities are not complete, it's a question of managing the risk of reletting, not mitigating losses.
                  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
                    As jpk says, you can agree a surrender.

                    Comment


                      #11
                      jpkeates,

                      yes you are right, it is managing the risk of re-letting. indeed he plan to leave without formality, so you think i should consult a lawyer? any recommendation?

                      Comment


                        #12
                        Originally posted by mariner View Post
                        Is it even an AST if a Corporate T?
                        Having rented a flat via my ltd company when I had contract work some 120 miles away and just needed to reduce the cost of staying 4 nights in a town where even b&B was like being mugged, I didn't really understand the implications of this question.

                        Until I became a LL myself and found that on 2 points my AST for that flat could not have actually have been an AST.

                        One It was rented to a corporate ltd company and not an individual, and Two even if it had been to an individual, it wasn't my main residence, as I own the house that I'd rather live in, (if only well paid contract work were available nearby).

                        The second point seems to mean that if a person is now living permanently somewhere else, then the AST is now void, and the first is that it was never an AST even if the paperwork say it is.

                        In either case, I summise that eviction / ending the tenancy as if it were an AST is not actually essential and there might be a better and legal way to achieve this. I guess a GOOD solicitor who knows the difference between a commercial letting contract and a residential AST might be worth his weight in fancy buttons.

                        Comment


                          #13
                          In that specific case, it's very unlikely the AST would be "void".
                          It probably wouldn't be an AST, but the actual contract would be valid (it would simply have the wrong name) and some of the terms might be struck out.
                          But it's likely to continue being a valid lease agreement between the two parties.
                          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


                            #14
                            who is liable for the agent fee when tenant breaks contract

                            I used an agent to find a 20 month contract. with the fees paid monthly
                            now with 12 months left, the tenant is breaking the contract by simply left the property empty.

                            Although the contract said the tenant is liable for the lost agent fee (close to 2000) if he breaks, the agent insists that the letting contract is between me and the tenant. so he is chasing me for the lost agent fee.

                            as a goodwill, I said i can agree to use the remainder of tenant's deposit (about 1500) to cover the agent's fee. I can also agree to reuse this agent to find next tenant. but the agent insists I am liable for the penalty and threatens to bring the case to small court.

                            Do have a good chance to defend myself in court? what is the best thing for me to do?
                            Can I say the agent's claim of lost fee is dependent on the tenant?

                            Comment


                              #15
                              What does your agreement with the agent say?
                              It is that agreement that determines who the agent can collect from.

                              Your tenancy agreement is how you would recover that cost from the tenant.

                              They're two separate 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

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