UK Landlord Forum / Life

As a landlord, just a small 1 bed property, my home, whilst overseas I decided to rent it with a well known high street agency.

The tenancy was set up as a 2 year fixed and that was completed back in mid April 2024.

Because the agency had been extremely poor, I decided to move my property to a new agency, and I gave my original agency 3 months written notice that I would like to terminate with them at the end of the 2 year term. I got confirmation of this having been accepted by email from them.

My sitting tenant wanted to remain, and I told him the local agency I had re-listed the property with, which he went and asked to start a new agreement.

To me, this seemed to be a non troublesome opportunity, I know the tenant, and for both of us it would seem to be a suitable proposition to go forward together, as he was also very unhappy with the original agency of not replying to emails and issues.

I looked through my agreement with the original agency and in the terms there is nothing indicating that I would be in any trouble, but I am not a lawyer.

Today I received an email from the original agency stating that because the tenant is still at the property I am liable to pay the full years commission, about 2000.00 in total.

I cannot believe this, because even my new agency had informed me there shouldn't be any issues with this arrangement because I had given instruction to terminate, and they also had all of the terms and conditions as I handed them over to them, because obviously I was a little hesitant concerned of any issues arising.

Can anyone give me any advice and help?

It is not uncommon for an Agent to consider the Tenant 'theirs'... not 'yours'. We've seen this before, plenty of times. It should all be covered in the Terms of Business you signed with the Agent. There's no point putting any faith in what the replacement Agent says, they're probably up to the same game.

Pragmatically, whether this is enforceable in any realistic way is something I'd question. I might advise one quick email back, stating your position and then closing the matter ("For the avoidance of doubt I now consider this matter closed."). The ball is in their Court (sic) and if they want to take it further they can, I suppose, but it's not like they can withhold the rent that might be paid to them or raid your bank account for the funds - you have no financial linkage to them and you have to willingly hand over the money, right? So simply don't.

Agents simply don't help their reputation, do they?

Thank you so much Hippogriff

Your response is the sentimentality I would hope people and business' alike use to proceed, but my friend who is a lawyer, but not property lawyer, has reviewed my terms and feels I am liable, I have listed them here below, changing the agency name to X, just to be safe.

I have also done what you suggested, before your response, because I don't feel anything in the terms, explicitly says receiving rent from a totally different agency after a party in the contract has instructed its termination. But, Im no lawyer and there are always ambiguities between the lines, some more obvious than others.

I have also complained to the agency because this is a necessary step when taking things further with the property ombudsman, my tenant at the time was also out of work, so I literally wanted to help him, because X was insisting in a significant rent increase. But overall X was extremely substandard, never answering emails among many other things.

This is what it states:
1.2 Renewal Commission
1.2.1 X will endeavour to contact both the landlord and tenant before the end of the Initial Agreement to negotiate an extension of the tenancy, if so required. 1.2.2 In the event that the tenant renews, extends, holds-over and/or enters into a new agreement for which rental income is received, commission becomes payable to X ("Renewal Commission"), subject to the cap set out in clause
1.2.3 below.
1.2.3 You will not be liable for Renewal Commissions relating to any period beyond the end of the second year from the expiry of the Initial Agreement.
1.2.4 The Renewal Commission fee is due and payable on the commencement of each Renewal taking place within two years from the expiry of the Initial Agreement.
1.2.5 Where a Renewal is for an agreed fixed term, the Renewal Commission fee is charged as a percentage of the total rental value of that agreed fixed term, subject to the limit under clause 1.2.3 where applicable.
1.2.6 Where there is no agreed fixed term for a Renewal, the Renewal Commission fee is charged as a percentage of the total rental value as if the Renewal would be for the same duration as the Initial Agreement, subject to the limit in clause 1.2.3 if applicable. See also clause 1.2.8 and 1.2.9 in respect of rebates once the tenant vacates the property.
1.2.7 The scale of Renewal Commission fees charged is as set out on page 2.
1.2.8 If the tenant terminates the tenancy by serving a valid notice to quit or by exercising a break clause prior to the end of the period for which Renewal Commission has been paid in accordance with clauses 1.2.4 to 1.2.6 above, X will refund the commission for the remaining period. The commission will be refunded within 14 days of the tenant vacating the property.
1.2.9 Where the tenancy is surrendered prior to the end of a renewed period/ term you will not be entitled to any refund from X. If the tenant asks to surrender the tenancy, X will seek your agreement and where you agree, seek to recover on your behalf from the tenant an amount equal to the commission incurred by you for the unexpired portion of the tenancy as a condition of your agreement to the surrender. X does not guarantee the recovery of these funds.
1.2.10 Renewal Commission will be due in respect of Renewals where the original tenant remains in occupation. Where there is more than one tenant, Renewal Commission will be payable in full where any or all of them remain in occupation.
1.2.11 Renewal Commission will be due whether or not the renewal, extension, hold-over or new agreement with the tenant is negotiated by X.
1.2.12 Renewal Commission remains payable if the tenant assigns the tenancy during the Renewal, whether or not the assignee is introduced by X. 1.2.13 Liability for Renewal Commission will come to an end once the property has been sold.

Yes, the Terms of Business (that you signed) would suggest you are liable... however, that's just trickery. Commission should be paid, but for a service provided - not in perpetuity, even if a service is not being provided. They are now tricking you again, by subtly encouraging you to go through a Complaints procedure.

Personally, I would state my position, then ignore all communication. If they want to progress it further and further then one day in the future you'll be in front of a Court and it can be explained that you parted ways, amicably and correctly, with the Agency back in 2024 - with a zero balance of anything - but they're now trying to charge you for no service provided. In black-and-white it may appear bleak, but in front of a real person it might be laughed-out.

Or you could suggest something modest in full and final settlement. This is the problem with Agents in the industry, they cannot be trusted to go against their worst behaviours. Let's be clear - they want money from you in exchange for nothing. What would you call that? They're in effect going to force you to evict your happy Tenant, all because they consider that Tenant theirs. It's just preposterous and not something you think about being a real-world situation when you're signing up with an Agent on day one. When a layperson simply cannot begin to imagine how low-down they can be. This is why they're sneaky as hell. In a nutshell, this is why some people actively hate them.

There may be Case Law where such attempts have either succeeded or been thrown-out... suggest looking up some Cases with "Foxtons" involved. They were pretty famous for these things - they were deemed unfair terms in consumer contracts and even went up against what was the Office of Fair Trading.

This query has been raised on the Landlordzone forum as well.

The issue is that while the OP may genuinely have believed that they were able to terminate the agreement by giving three month's notice, they couldn't while the tenant was still in place. That's possibly an unfair term, but park that for a second.

What happened then isn't entirely clear. The tenant was in place throughout, so the original tenancy seems to have continued (the OP says that it came to an end, but that's not possible). The OP then got the tenant to apply via another agency for a new tenancy via them, for the property they were already living in (with a "live" tenancy).

That's a mess however you look at it. And it looks very much like bad faith from the landlord and bad faith/terrible advice/practice by the new agent.

So, the commission for a year is £2,000. Will the old Agent ask for this as long as they believe the tenancy they arranged is ongoing? I'm guessing it's not a one-off for this year.

It feels more like ignorance from the Landlord rather than bad faith. No excuse for ignorance, but it looks like they tried to do what they thought was needed in a suitable timescale... the old Agent could have easily reverted in their acceptance and said: "Sure, we accept that you're terminating our services, but do you understand that... Y and Z?" - that was seemingly not done.

I can't stand Agents. They knew how it was going to work. They knew how the Landlord thought it would work. They're really the ones who could've changed perceptions and assumptions. Assumptions based on common-sense. They didn't want to, for just this outcome. I agree the new Agent has shown something of themselves.

A solution is needed where those two parties accept the linkage is over. That's either by ignoring it or paying some blood money or fighting it, not using common-sense (it's beyond that even now) but by citing previous sound law examples.

I'm possibly being a bit judgemental, but there are enough people in this story doing things that don't make any sense to make me think that there's some dodgy things happening.

The new agency (who are better than the old one) accepted an instruction from a landlord that they wanted a new tenancy setting up for a property with a current tenant (but who's tenancy was about to end) and then when the old tenant presented themselves as a candidate for the new tenancy accepted them. That doesn't sound "right".

The landlord thought that the tenancy would just "end" (possibly, that happens), but wanted to keep the same tenant and was prepared to pay the new agent to sign up an existing tenant? And the tenant was happy to do that?

And the (quite well known) London agent (who's terms are helpfully online) accepted a three month cancellation without batting an eyelid and doing what every agent who gets a termination notice has ever done - which is tell the landlord that they can't cancel (which I don't think they could)?

There's too many parts of this where someone would have had the chance to say "hang on" and doesn't seem to have done that it all seems a bit fishy. I think the landlord thought they could pull a fast one.

Maybe not judgemental, maybe insightful?

The three month timeline was the thing that made me come down on the side of the Tenant and conclude a dodgy outgoing Agent. It felt like a trap. But, well, the answer is the same - it's always in the Terms of Business anyway... and there it is, quoted. I don't how much success is gained in these situations, but I'd hope a bit of blood money might oil the wheels. 

Or maybe this will remain the best managed property in the history of the PRS, with two Agents taking damn good care of it. (?)

Firstly, I would like to thank you all who have taken the time to contribute to the thread, both those being supportive and those being critical, for me I always prefer to hear the non sugar coated assessment as well as the ear pleasing responses, so again, thank you.

About 'pulling a fast one', I would just like to say, when I instructed the new agency, I had chose to leave Foxtons due to a really terrible received service. Foxtons had told me that a 200.00 pcm rental increase was justifiable in the current market conditions, but I had no interest in the additional money, if Foxtons were to remain the agent because as I say, their service and assistance on a range of issues have been extremely poor.

I informed my tenant of the agency change, in my mind at that time, I did not envisage or care whether my tenant stayed on or left, because I just wanted a better agent to deal with my property, as I am residing overseas, but my tenant told me that he really wanted to stay in the property, and had also just been made redundant.

So eventually the new agency contacted me and told me my existing tenant had visited their branch and wanted to rent, I asked the agency multiple times, is this possible, well as stated above, having any trust in agents from here on is a lesson learned, but they did re-assure me everything should be ok. I didn't feel totally enamoured by their answers, but again, my tenant had lost his job and I felt a little moral pressure to not just jettison him into a rather cut-throat rent increasing rental market, and the fees attached with various agents related to that.

So the new agency even offered a reduced fee because of that too, so it seemed fitting for him. And, I only increased the rent by 50.00 pcm, simply because over the two year fixed period, the bottom line of profit hasn't been as I had hoped it to be, because so much money had to go into various maintenance problems the tenant had experienced.

I did discuss with the tenant about the increase and for the sake of not having to move out, pay higher agency fees, not needing to pay a 'deep clean' too, he was happy with the increase and again, really emphasised to me he wished to stay there.

Im not saying Im not naive in seeing this all as 'pulling a fast one', but at the heart of what has transpired was the main fact I wanted to get away from Foxtons because it was literally the most awful experience for me, and for my tenant. I would obviously be better off financially staying with Foxtons, even more so now, with this charge being demanded, but it was not about money, and I really had hoped to help my tenant, and felt the advice from the new agency was legally worthy.

Lesson learned, and Foxtons have informed me that they will not reduce the charge, but have agreed to allow payment to be made in stages(quarterly). I am hoping to bring this to the attention of the ombudsman and hopefully get some reduction in the fee. Not sure how that will stand up, but I will try.

But won't they do the same thing next year? And, once you've paid it, the precedent is set? Or is it a one-time-thing?

Thanks for the update.

Sorry for the non-sugar coated attitude (I must have been having an off day). I withdraw my pulling a fast one and replacing it with a "doesn't really know what they're doing".
But your supportive attitude towards your tenant is to be recognised and commended, so I'm shutting up now.

In their response to my complaint they said this contractual agreement will end once the tenant vacates the property.

I have replied that I am dissatisfied with this resolution to my complaint, and that I would like the amount reduced significantly and seek a final settlement with this lesser figure and confirmation that any subsequent payment ensures that all contractual obligations are severed between us both.

I am yet to receive a reply, but I suspect it will fall on deaf ears. Will most certainly keep you posted.

No problem JPK, I agree pretty naive because I have never been a landlord ever in my life, and try and keep a distance from it all by having an agent, and had assumed Foxtons would be decent, and again, too trusting with what the new agency said, who I have contacted and now seems to seem very stand-offish "we cannot make any comment on any agreement regarding yourself and Foxtons".

Disbelief from what seemed originally like very friendly and relatable people.

Its a learning curve, so please forgive my overly trusting nature and naivety. And no problem, I welcome all comments, and you said nothing wrong, definitely keep up the non sugar coating because the hard truths are often the best medicine.

Well, as it happens, I can possibly help here. There's a very well established principle that letting agents can't charge fees for services that they no longer supply which you can cite. It's very helpfully called the Foxton's case, because guess who's business practices caused the Office of Fair Trading to intervene and reach the settlement?

I'd suggest writing to Foxtons requiring them to cancel their charge on the basis that you have cancelled their services, that your next action will be to wait for them to take legal action to recover their unlawful charge as you do not intend to pay it. And, if they do not comply, your next action will also be to refer their attempt to revert to trading practices that they have previously agreed to refrain from to the Competition and Markets Authority (which replaced the OFT).

For the avoidance of doubt, Foxtons were allowed to charge renewals, but only where this was "'actively flagged' up to consumers", which they have manifestly failed to do when they received your letter cancelling the service. However, they also undertook not to charge fees where no service was provided. Which is the case here.

For a number of very boring reasons I have a lot of experience with the CMA and I would hope that the threat would trigger the right response within Foxtons if you raised it at a senior enough level.

OK, I did read that case of the OFT Vs Foxtons, but I couldnt really find what the outcome of it was, except that Foxtons started an appeal and later backed out.

I had assumed that they might have updated their terms to indicate more specifics to prevent such things arising again, but I felt that when I informed them of my termination request, it would have been the perfect time to notify me that if the sitting tenant remains there I will be liable to pay their renewal charge.

I will await their response to my request to a final settlement and then fire back with the information you have provided, and I will definitely keep the ombudsman involvement mentioned in each correspondence I have with them.

Thank you to all of you, I feel like there is such a murky world in this business sector, thats very saddening.

It's a very competitive thing property agencies, particularly in London and it's hard to make money. Foxtons is very big and very profit focussed and the remuneration is hugely incentive based and target focussed. There's a tier of management and then, mostly, young people chasing business madly. The staff turnover must be huge.

One consequence of this (which isn't limited to any particular agent or agents generally) is that getting someone to issue a credit for income recognised as profit is remarkably difficult, which has a huge impact on customer service and perception of the organisation.

There probably needs to be a goodwill pseudo "budget" which is an amount that the business can write off without it affecting people's incentive based income, otherwise people are being incentivised to sacrifice the company image for today's paycheck, because the company image is someone else's problem and therefore personal cost free.

Even if the person who issued the invoice did so in good faith, cancelling the fee has a double cost, they have to both give up the revenue and replace it from somewhere.

I realise you're already in the middle of a Complaint procedure... but, if only for my own completeness, this is how I would have started and finished my interaction...

I'd write one email to them after receiving the invoice, it would detail the fact that is no service being provided, I'd have become familiar with any Case Law and would have cited tidbits or the conclusion, then I would state that I would not be paying, in part or full, and state that I consider the matter closed.

I'd then see what happened, but I deliberately wouldn't respond to any contact directly from them, I'd wait until it escalated to a party I should respond to (expecting it probably would not). It's kinda what I stated in my first reply, and it's not putting your head in the sand; it's a little more.

If - eventually - you do decide to pay anything at all, make damn sure it is clear it's in full and final settlement, regardless of their current ludicrous position that this money is due while the Tenant is in residence.

Then, when the dust settles, take stock of the relationship you have with the new Agent too. You can't self-manage, of course, we get that.

Good luck and we'd value an update in due course.

Thank you for your knowledge on this matter, thank you very much.

I looked at the outcome from the High Court of that case, and looking at this would it not suggest that their terms as posted above convey the necessary points clearly. I didn't understand them but as I say, I don't really absorb this kind legal speak very well at all.

QuoteThe ruling and order prohibit the use of sales commission and third party renewal commission in Foxton's letting contract, and require that where renewal commission is to be charged, it must be clearly brought to the consumer's attention - both in terms of the liability to pay it, the circumstances in which it will be payable, and the amount or rate at which it will be charged.

My point is that for something to be "clearly" brought to your attention, there has to be an attempt to do that beyond the term just being there and being clear. This a consumer contract, you're not presumed to be any kind of expert. Many organisations aren't clear about their responsibilities, it's not limited to large letting agencies. Somewhere between it being prominent and letters of fire burning in the air.

But, at very least, when you wrote to them, not responding with their view of the issue and simply waiting and electing to charge you a fee seems to be the opposite of "clearly".

There is another part of the judgement (relating to sales commissions on properties sold by someone else), which confirms that people can't claim fees for work that they don't do (and they can't manage the property in this situation, even if they wanted to).

To be fair to Foxtons, while I was employed on occasion I created contracts and other documents (particularly terms and conditions) that were designed to be hard to interpret and sometimes appear to say one thing by mean another. I'm quite good at it, so I'm not really on the moral high ground here.

I think that must be part of the course they go on, winning trust and appearing to actually like you and care about you.My first LA was a family firm, all first names,I walked in and it would be "Put the kettle on, our favourite lady's here!"  Oh the cakes I baked for them when they got a tenant for me, the glowing reviews I posted.Then they let me down very badly, and how fast the masks slipped. Horrible phony people.

Again, JPK thank you for your advice. I just wanted to clarify, that my contract with Foxtons was not a maintenance one. It was originally for the 1st year of 2 year agreement, but I opted out of it due their woeful service for myself and the tenant.

So the charge is being enforced on the fact of the tenant introduction, and them seeing my tenant as still being "theirs".

OK, but you can't just "opt out" of something you've agreed to.

And, if the agent has no ongoing involvement in the tenancy, how can their woeful service matter?

The tenant that they found was obviously acceptable and the service was limited to tenant find.

Hey jpkeates, thanks so much for all of your valuable knowledge as always!

I just wanted to clarify the 'opting out', what Im trying to say is, that during the 2 year agreement(was full management), after the first year I asked to leave the full management service, which is a higher % of the rental income going to them each month.

It is possible to leave that full management service, but they make it really tricky, and try a hard sell bouncing you between 2-3 people telling you its really important to have it for "peace of mind", but in fact, with every maintenance issue my tenant told me the agency wasn't reply to emails and phone calls, so I had to arrange the repairs myself from overseas. This happened 3-4 times and I can tell you it was very tiring, so thats why I declined their hard sell and finally left that service.

The only service they were providing thereafter, was the drawing up of the agreement, holding a spare set of keys, which they lost, processing the rent payments and the original tenant introduction. There may be other things in between the lines Im not sure of, but these are the things which obviously spring to mind.

Anyway, have a good weekend and I will definitely keep this post updated as things transition.

Again, thank you all!

Quote from: b_buchanan on May 15, 2024, 10:20:01 AMAs a landlord, just a small 1 bed property, my home, whilst overseas I decided to rent it with a well known high street agency.

The tenancy was set up as a 2 year fixed and that was completed back in mid April 2024.

Because the agency had been extremely poor, I decided to move my property to a new agency, and I gave my original agency 3 months written notice that I would like to terminate with them at the end of the 2 year term. I got confirmation of this having been accepted by email from them.

My sitting tenant wanted to remain, and I told him the local agency I had re-listed the property with, which he went and asked to start a new agreement.

To me, this seemed to be a non troublesome opportunity, I know the tenant, and for both of us it would seem to be a suitable proposition to go forward together, as he was also very unhappy with the original agency of not replying to emails and issues.

I looked through my agreement with the original agency and in the terms there is nothing indicating that I would be in any trouble, but I am not a lawyer.

Today I received an email from the original agency stating that because the tenant is still at the property I am liable to pay the full years commission, about 2000.00 in total.

I cannot believe this, because even my new agency had informed me there shouldn't be any issues with this arrangement because I had given instruction to terminate, and they also had all of the terms and conditions as I handed them over to them, because obviously I was a little hesitant concerned of any issues arising.

Can anyone give me any advice and help?

Consult a lawyer to review your original contract with the agency. If the contract doesn't clearly state you owe fees for the tenant staying, you may have grounds to dispute their claim. Your new agency might also provide support in resolving this issue.