Letting agency fees after invoking break-clause

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    Letting agency fees after invoking break-clause

    Hi,

    I'm currently in a flat with a one-year fixed term contract. There is a 6-month break-clause in place which allows me to end the agreement / contract with a 2-month notice after 6 months of occupancy.

    I've handed in the notice however, the landlord & letting agency have mentioned that I'll still be liable for paying the pro-rata commission that will be incurred by the landlord during the unexpired portion of the tenancy i.e. since I'm leaving after occupying 6 months of occupancy, I'll need to pay the landlord's letting agency fees (~13% of the monthly rent) for the remaining 6-months.

    I'd be really grateful if someone can answer a couple of questions on this:

    1. I presume the way letting agency fees work is the landlord is obligated to pay them a commission on a monthly basis regardless of whether a tenant is occupying the flat. However, if the flat is re-let after my departure, the landlord can simply use the new tenant's rent to fulfil this obligation.

    It seems an unfair transfer of obligation to the old tenant i.e. me to cover the landlord's letting agency fees even after a new tenant has occupied the flat. Is this a sufficient basis to question this clause and avoid payment of this fee (~ £1,200 for an unexpired period of 6-months) even though it's in the contract and I've signed it?

    2. Since the break-clause essentially terminates the agreement / contract, does it also not make this clause invalid? I.e. I'm not obligated to pay this fee?

    Any help on this would be really appreciated. Thanks.

    ----------------------------------------------------------------------------------------------------

    The exact wording of the letting agency fees & the break-clause are below:

    19.2.3 Should the Property be re-let during the Fixed Term, the Tenant will also be responsible for the repayment of any pro-rata commission fees that have been or will be incurred by the Landlord for the unexpired portion of the Tenancy (where <letting_agency_name_removed> is the Letting Agent, this fee is calculated at 13.2% incl VAT (11% + VAT), or of the Rent for the Fixed Term of the Tenancy).

    Break-clause:
    Either party shall have the right to terminate this Agreement by giving the other party not less than two months' advance written Notice. In case of the Tenant such Notice will only be effect if sent by recorded delivery to <letting_agency_address> or via email to <letting_agency_email>. This Notice may not expire before the end of the first six months of the Tenancy.

    #2
    It is ambiguous but I might refuse to pay, write saying why and see if they try to recover the costs.
    You would be paying for a non-service.



    Freedom at the point of zero............

    Comment


      #3
      It looks like a penalty clause to me, which is how I'd refer to it in any correspondence.
      They're not legal.

      More simply, the break clause notice ends the tenancy, which means that the fixed term has also ended.
      So it's not possible for the property to be re-let during the fixed term.

      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


        #4
        Originally posted by jpkeates View Post
        It looks like a penalty clause to me, which is how I'd refer to it in any correspondence.
        They're not legal.
        Also refer to it as such when telling the deposit protection scheme that you disagree with the LL/agent trying to deduct the money from your deposit.

        It looks to me like the LL has foolishly agreed to pay the agent commission for the 12 months instead of for the length of the tenancy and wants to get the money back from you.

        Comment


          #5
          Hi kaidranzer,

          I'm looking to invoke the break clause in my contract and comparing the wording, it looks like I'm with the same real estate agency. Please, can you tell me what the outcome was? Did you have to pay the prorated commission? I've invoked break clauses in the past with different agencies, but they never had such a clause regarding pro rate commission. Any help would be of great help.

          TIA

          Comment


            #6
            IMO activation of the break clause only reduces fixed term to SPT after min 6 months.
            Who requested break clause, LL or T?
            Why was the break clause activtated?

            Comment


              #7
              If the break clause is activated the agreement comes to an end. If the agreement has ended clause 19.2.3 cannot be enforced.

              Comment

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