Expert Contract Lawyer needed

[sailor1705]

Hi

Do any of the members here wish to take on a contract case. Directors here foisted an agent upon us who issued a contract for 12 months, with a 6 month notice, and with a 24 month penalty clause of £1000. They may try to renew in the same way in two months time. Please help

[dant]

Can you post a bit more information on this? How many pages is the contract? Parties?

How can you have a contract for 12 months, then insert a penalty clause for 24?!

I'd be happy to review on behalf of my firm if you can establish a little more, first.

[ram]

How can you have a contract for 12 months, then insert a penalty clause for 24?!

Ours did that, a 12 month contract with penalty clause if you dissmissed
them before 24 months.
This is because of the costs to set up, all the preliminary work, and for
that, they expect a 2 year contract, hence if you pull out before 24
months, they are basicly saying, well, we need our setup costs, which
we wavier if you keep us for 2 years, but less then that, we want
£x to cover set up costs.

[ram]

They may try to renew in the same way in two months time. Please help

i would not waste your money.

If the directors decide to renew, or remove, there is absolutely nothing
you can do about it. And if you could, it would cost you more than the penalty.

So WHO, just WHO will terminate the contract ?
and will it be within 14 months ?

but you will be going into the second year, and we know it wil last to
the end, and the start of the 3rd year, there will be no penalty clause.

Don't waste your money on something you CANNOT change or alter.

When we get rid of the directors, then you can leave the agent, and
as the directors who signed the contract no longer are Directors, then
and only then may you be able to sever the contract ( maybe )

R.a.M.

[Lawcruncher]

Ours did that, a 12 month contract with penalty clause if you dissmissed
them before 24 months.

I am trying to understand how that makes sense.

[ram]

To dissect the question.

1) I think sailor1705 is asking how do you get out of the
£ 1000 penalty if you dispence with the Managing agent
before 24 months from the start of the contract.

The answer is you can't, as the contract was signed with
that condition attached, and is a normal condition as has
been verified twice on here.

2) Worried that the same conditions apply for the next
term of the contract.

From memory, the managing agents have been employed for
the last 10 months, so when they sign for a further 12
months, the £ 1000 penanlty is still in force untill 24 months
and 1 minute after the start of the contact.
No penalty once the 24 motnhs is up.

This penalty cannot be removed, as it is in the contract
that was signed, unless they have seriously been negligent,
but again, sailor1705 can't do anything about it, as it's the
Directors that dismis the agents, not the leaseholders.

3) sailor1705 is probably thinking that she needs to get rid
of the agents, either due to mis management, or taking over
the running of the block of flats.

If they are negligent you can insist the £ 1000 is not payable,
but it's the management agent that takes the money out of
the bank account.

As i said, if that is your -beef- you cannot get out of the
£ 1000 penalty unless litigation ensues in the normal course
of events due to the problems we all know you have there.

So is your question - How do we get out of paying £ 1000
if contract ended under normal mutual termination ?

The answer is you can't, under normal circumstances.

R.a.M.

[Gordon999]

Hi

Do any of the members here wish to take on a contract case. Directors here foisted an agent upon us who issued a contract for 12 months, with a 6 month notice, and with a 24 month penalty clause of £1000. They may try to renew in the same way in two months time. Please help

You should call a meeting to leaseholders to call on the directors to renew any management contract after the first year has ended , with 90 day notice to terminate by either side. Reason is that "RTM Companies" can legally take over the service charge administration after serving official notice to of RTM claim.

[sailor1705]

Hi

We here realise that we have been stitched up. 50 per cent of the leaseholders are not interested. 6 of us are trying to get rid of the directors who have the ones that don't care in their pockets. The continually break the LL & tenant Act 1985 by not doing S20 notices, not doing any Service Charge accounts, and breaking the lease by not having any certified accounts. We want things brought into the 21st century. We have rights, but are not getting them. Already had a tribunal, won most of it.

4 of us are now refusing to pay any more, in the hope that they take us to court or an LVT.

[Lawcruncher]

I think we need to see the relevant wording in the contract before we can say whether the penalty clause is enforceable or not.

[sailor1705]

Hi

Relevant wording is:

E. Term of Agreement: 12 months
F. Notice to terminate: 6 months
G. Visits claus,,,,
etc etc
H. The basic Fee (Clause 5.1) £120 per flat per annum +VAT
Agreed setting up fee £1000 payable only in the event of the appointment being terminasted by the Client within 24 months of the commencement of the Agreement

The Agent shall be entitled to retain any commission received by him or her in respect of the Property, without accounting to the client.

Hope this is sufficient to help

Many thanks for all your replies, but, somehow I think we are sunk

[Lawcruncher]

We seem to have a case of unclear drafting.

Taking E and F together, do we have a 12 month agreement which can be terminated by 6 months' notice, or a 12 month agreement which continues and can be terminated on 6 month's notice? It is only if it is the latter that the waiver of the set-up fee makes sense. This waiver is expressed as an incentive rather than a penalty and accordingly looks like it is enforceable, but only if you have a 12 month agreement which continues and can be terminated on 6 month's notice.

If renewing you do need to make sure that the contract is not exactly the same because the 24 months will start from the beginning of the new contact.