LANDLORDS, caution: could you be tied in to a letting agent forever?

I’d like to tell you a little story of woe. As happens quite regularly with CGT, a landlord recently expressed intent to leave their current corporate letting agent who wasn’t performing up to scratch and move the management of their property over to us mid tenancy. ‘YIPPEEE’ my branch manager thought, ‘that’s another lovely landlord and tenant to look after’. She informed the landlord of the process of moving over to us but advised that the landlord should first of all check their dis-instruction terms with their current agent as it could be a few months before we could officially take over the tenancy.

Now, sometimes people are unhappy and therefore, most letting agents will include in their terms of business a dis-instruction clause which often requires 3 months’ notice to part ways, or sometimes a fee must be paid to terminate the contract. However, this particular landlord proceeded to visit our branch a few days later with their contract in hand and a very concerned expression on their face. Unfortunately, this is where our story takes a worrying downturn. What we found was that the landlord’s contract with their current agent stated that they could not terminate their contract until the tenant the agency had first put into the property moves out. Basically, to move letting agent, the landlord must make their tenant homeless. Now, paying a fee to get out of a contract is one thing, but to have to actually serve your tenants notice in order to have the freedom to choose which letting agent you want to do business with is ridiculous, unfair and totally breaches one of the fundamental aims of a letting agent which is to put a good, rent paying tenant in a property for as long as possible.

 

With news of the government looking at scrapping Section 21 notices in a bid to stop ‘no fault’ evictions, have they even considered talking to national corporate agents who have this clause in their agency contracts? Although it’s a last resort, have they also considered that without being able to use Section 21 notices, a landlord could be stuck with a bad letting agent forever?

My caution to you landlords is this, read your contracts and identify your dis-instruction clause before signing, before it’s too late. The landlord in the story didn’t and now they have to face the dilemma of staying with a letting agent they dislike or have to ask their tenant to leave. So many landlords and tenants are completely unaware of clauses in contracts they are held to and this really could influence your freedom of choice in the future. No landlord wants to have to kick their tenant out just because their agent is not doing what they should do, don’t let this be you.

Angharad Trueman – Managing Director

If you found this blog interesting, why not check out my blog on abolishing Section 21s HERE.


Posted on Monday, 20 May, 2019