Signed tenancy under false pretenses?

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    Signed tenancy under false pretenses?

    I'll try to keep this short. Myself and my flatmate feel we have been duped into signing a tenancy agreement under false pretenses. We live in a 2 bed flat in London and a letting agent owns the tenancy agreement, take rent and hold deposit etc. Landlady deal with things like repairs. We've been model tenants and have never, and would never, miss a rent payment. But that's irrelevant.

    When we said we wanted the flat, agent said that it would be a 2 year contract, with no break clause. This was alarming because a lot can change in 2 years. They said the landlord was keen for a long tenancy and no break clause would be possible, but they repeatedly reassured us (verbally) that if we wanted to leave the property, we would be free to do so, as long as we found suitable replacement tenants to take over the contract.

    When we received the contract, there was a clause which said:
    'If all tenants wish to surrender the lease, they will be liable for the rent until new tenants move in, and will also be liable for the landlord's fee of 11% to the agent, for management of the property, for the remainder of the tenancy.'

    I questioned this to the letting agent, in an email, which quotes the exact clause. My email reads:
    "Please can you explain what the 11% fee is, and under what circumstances we would have to pay this? We understand that if we wish to break the agreement early, our liability for rent will cease when the new tenant moves in. The landlord's fees which are mentioned to cover the remainder of the tenancy - these fees are only applicable if we do not fill the rooms with new tenants prior to leaving?"

    The response from the agent reads this:
    "You would be liable for that fee if both of you left the property and we had to relet it (i.e. you had not found suitable replacement tenants). Typically this would be a situation where you both left at exactly the same time, as normally we would look at staggering the process."
    So, based on this correspondence, we were led to believe that we could leave as long as we found replacement tenants.

    Yesterday I called the agent to find out the details of this process, as we would like to move out in April. I was told:
    1) We (the tenants) cannot find replacement tenants, the agent has to find the tenants as this is what the landlord pays them to do
    2) If we wish to leave at the same time, we will be liable for this 11% fee, plus landlord's cost of setting up new contract (if we were to move in April, in total this would amount to £2500)
    3) One person has to stay on the tenancy until the end to avoid this fee. One person can go, but adding a second person to the contract would mean a new contract and we would still have to pay this huge fee for breaking the tenancy agreement early

    We have tried to speak to the landlady about this but she has said she will not deal with it and we must speak to the letting agent. So far we haven't taken any steps, except organise a face to face meeting with the letting agent this week to discuss the situation and also to see if they will do anything to help us (which I doubt).

    Looking for advice on what we can do from a legal perspective. We would never have signed this contract if we had known this to be the case. I feel we have been completely misled into signing it, and that the agent knew we would not fulfill the full term and therefore added these measures (no break clause, exceptionally long contract) because they knew they could get this fee from us.

    I understand a tenancy agreement overrules an email. But I asked for clarification on a specific clause before signing the contract and was told incorrect information. I feel this has misled us into the contract. Is there anything I can do? I am going to see a Citizens Advice solicitor next week. Any advice would be much appreciated.

    #2
    The email is only helpful because it clearly implies that you can find replacement tenants because it outlines the consequences of your not finding suitable replacement tenants.
    So clearly there must be a situation where you can do this otherwise you can't fail in it.

    The agent's verbal assurances are part of their advertising and are relevant, albeit not much help in the absence of any actual proof.

    When did you sign the agreement?
    What does the agreement say about whether it can be assigned?
    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
      Hi, thanks for your response. We signed the agreement about last February - the email correspondence between myself and the agent was on 18 Feb so we must have signed the agreement the day after or something. We only signed the agreement once he had confirmed we could fill the rooms ourselves. Not sure what you mean by your second question..

      Comment


        #4

        It's not normally possible to replace tenants on a joint tenancy (it's just something that large city letting agents have invented to avoid doing their job properly).
        For a tenancy agreement to be assignable it should really say that it can be assigned.
        Many tenancy agreements say specifically that they can't be assigned (or can only be assigned under certain conditions).

        The agent can't charge the landlord a fee for a service that they can't carry out (Google "Foxtons case") and they're not providing you with any kind of service, so they really can't charge you what looks like a penalty charge (as they're not legal).

        After June 1st that term wouldn't be possible as the Tenant Fee's Act would apply to the tenancy.

        However, the downside is that if you've signed up for a fixed term of 2 years you're committed to that and letting you leave early is at the landlord's discretion (via the agent) and they only have to keep saying no and you're both liable for the rent until the 24 months expires.
        They can simply keep deciding that any replacements you do find are unacceptable for some reason.

        The most likely outcome here is that you will leave in April, give them the keys back and they will play tough, but eventually have to retake possession which ends the tenancy and your liability to pay rent.
        Then it's up to them and the landlord to see whether they have the nerve to try and take you to court.

        I'd get very familiar with the wording of your tenancy agreement, they're often nowhere near as watertight as people think. But you should probably work on the basis that they are until you can prove otherwise.
        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


          #5
          If the LL did try to pursue for losses I wonder whether promissory estoppel might be helpful here?

          Comment


            #6
            London is generally considerered to be the Wild West in the PRS.
            You signed a Contract before fully realising the full implications.
            I cannot see any false pretences.
            As said, you are liable for full Fixed Term rent unless you can successfully plead your case with the LL.

            Comment


              #7
              Why did you agree to rent a property for 2 years when you already had concerns about that?

              It's perfectly legitimate for the landlord/agent to make you pay the re-letting costs when you wish to break the contract although the 11% management charge for the remainder of the tenancy is unreasonable and should be challenged as an unfair term under consumer legislation.

              If you dont get anywhere with this you can tell the Agent that you intend to sublet the property for the remainder of your tenancy and plan to approach the Council to place a homeless family there. There is almost certainly a clause in your TA prohibiting this, but in reality there is nothing the Agent can do about it as there would probably be no loss and therefore no benefit in suing you for breach of contract. This tactic should only be used for bargaining purposes though.

              Comment


                #8
                it sounds stupid in hindsight but we agreed to this ridiculous contract because we wanted the place and we were led to believe we would be able to leave the property as long as we found replacement tenants. We understood “reletting” to be advertising, viewings etc which we would be doing so there would be no cost to them, as tenants pay for referencing checks etc. We are happy to pay for the landlady’s cost for a new contract, which is about £400, bevause this is an expense she wouldn’t have incurred if we stayed the duration of the contract.

                our issues is with the 11% fee. It’s thousands. The agent won’t even lose this because the landlady will continue to pay it as soon as new tenants come in. They want it from us even though they wouldn’t have had that money anyway if we had stayed. And I explicitly questioned the agent about this fee and was told we would be liable for it if we hadn’t found replacement tenants. Now they’re doing a 180. I deem this to be unfair treatment as they have misled us into this contract and therefore paying this fee. What I’m trying to work out is whether we have grounds to not pay it considering they’ve told us in writing it doesn’t apply as long as we replace ourselves...

                Comment


                  #9
                  Originally posted by brixton123 View Post
                  We understood “reletting” to be advertising, viewings etc which we would be doing so there would be no cost to them, as tenants pay for referencing checks etc.
                  Not any more, charging tenants for referencing is no longer legal.
                  We are happy to pay for the landlady’s cost for a new contract, which is about £400, because this is an expense she wouldn’t have incurred if we stayed the duration of the contract.
                  She would have incurred it later, so it's only the timing of the charge that's changed.

                  our issues is with the 11% fee.
                  I don't think that they agency would be able to make that charge stick, but the issue isn't really the cost.
                  They don't have to agree to end the contract early at all.
                  Even if you were to win the argument about being allowed to replace the tenants yourselves, all they have to do is keep declining the people you offer up.

                  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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