Cancelation of Agents contract

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    Cancelation of Agents contract

    I am a landlord. Agent found tenant who signed for a year in August 2009 (I had been with this particular agency since 2005) In meantime, I wasn't happy with the way the agent handled my property (recovery of both my and tenants deposit). I thus decided to terminate my contract with the agent. I sent a written confirmation of the termination.

    Sept 2010 same tenants agreed to stay a further year and signed a contract (no agency involvement)

    2 weeks ago (June 2011- 10 months after the tenants signed the contract) I received a letter from the terminated agency demanding 8% of the annual rent. (Original commission on a rolling contract/letting renewal fees was 6%).Original contract clearly states that I should pay comission eaven if they are not involved.

    I refused to pay stating I had terminated the agency agreement. They responded with a £45 late payment penalty, and further further demand for the money. They also threatened me with a debt collection agency/bad credit rating.

    1.Should I pay?
    2. If I do, should I give the tenant notice, so that I can free myself from this contract (legally)

    #2
    Unfortunately, you signed a contrac that says you owe the agent for as long as the tenant is in the property. You can not simply walk away from such an agreement.

    Do you want to lose this tenant? If so, then by all means send a s21 notice, but you will not cease to be liable for the fees until the tenant leaves - which could be 4 or 5 months off yet.

    How does the original agreement outline the fees to be charged? At X% or at 'the current rate'?

    How was the term regarding liability until the tenant leaves shown in the contract? If it was hidden in the tiny print, you may be able to defend a claim - see OFT Vs Foxtons.

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      #3
      Thanks Snorkers,will pay agent his commission and T will get notice as per contact (2 months)

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        #4
        No! Do not pay. There is no such thing as an indefinite contract. Further, "perpetual commission" is only payable if it is drawn to the client's attention before he signs, is mentioned in the agent's publicity material and is couched in clear terms.

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          #5
          Originally posted by branks View Post
          and T will get notice as per contact (2 months)
          You can not just throw tenant out at the end of the contract, even if you have given notice. Plan for an extra 2/3 months if tenant exercises their right to stay put.

          Originally posted by Lawcruncher View Post
          No! Do not pay. There is no such thing as an indefinite contract. Further, "perpetual commission" is only payable if it is drawn to the client's attention before he signs, is mentioned in the agent's publicity material and is couched in clear terms.
          Did you check out OFT Vs Foxtons? I suspect this is the caselaw that Lawcruncher is refering to.

          Lawcruncher - do you believe this is an 'indefinite contract'? I totaly bow to your legal expertise, but he contract does have an end date, even if that end date is phrased in a 'work it out yourself' way. Same way as an s21 expiry date can be a description of the date, not the date itself.

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            #6
            I think we need more information from the OP.

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              #7
              Originally posted by branks View Post
              I refused to pay stating I had terminated the agency agreement. They responded with a £45 late payment penalty, and further further demand for the money. They also threatened me with a debt collection agency/bad credit rating.

              1.Should I pay?
              The OFT v Foxtons ruling means you may have a chance of winning should this end up in court. See http://www.oft.gov.uk/news-and-updates/press/2011/82-11 I also think it's rather dubious that the renewal fee is higher than the original fee. I would say don't pay unless you think the renewal charges were fully flagged up to you in 2005 (as per lawcruncher's post #4), you were left in no doubt as to your liabilities, and that charging more for a renewal is not in the least unfair.

              You won't get a bad credit rating unless the agent takes you to court and wins, and you then fail to pay the amount you're ordered to. If you pay up within a month, and obtain a certificate of satisfaction from the court, it won't go on your credit record.

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