UK Landlord Forum / Life

Hi everyone and thanks in advance,
My tenants are currently on a spt contract, they have expressed an interest. in wanting to buy our property
I have noticed on my contract that the tenant belongs to the ageny and that the agent would be entitled to 2percent commission if we were to sell to the tenants (daylight robbery). I am wanting advice on what is the best course of actiion where the tenant and i don't get stung! The other issue is that if i end my agreement with the agent then i am liable to pay one months rent plus vat (effectively i would be in breach of contract). Thankyou

That's a fairly standard clause in agents contracts.
Check the wording carefully, as it often applies even if the agreement has ended (so you can't cancel the agreement to avoid it).

2% is roughly what an estate agent would charge, so you'll probably have to swallow it,
unless there's a time limit to the 2% deal you can wait out.

Agreed, standard and fair, and reasonable from the Agents point of view.

If I were you  I would definitely feel the same!

Perhaps have a word with the Agent, they may well accept say 1%, forget the extra Rent, if you made it known the full amount would be a deal breaker and would mean you ending the tenancy, and putting it on the market with another Agent, you never know??

hi thank you for your replies,  the statement actually says in the contract that "in the event that YOU decide to sell the property and the agent is able to demonstrate that in relation to the sale they have provided YOU with estate agency services, the AGENT shall be entitled to charge YOU a fee of 2% plus VAT of the negotiated purchase price. does this mean if I were to use another estate agent to value my property prior to selling I would not have to pay 2% charge. Two other things I need advice on is firstly, if the tenants were  to give notice then purchase the property after notice where would I legally stand in regard to fees etc? secondly is any fees set out like in the contract frowned upon by the property ombudsman? Thank you

My experience don't try and be clever, you will end up with stress and possible costs.

If your tenant buys the house you will in all likely hood be pursued for commission from the Agent.

The outcome could not be what you want.

If the Agent introduced a tenant who then buys your house, they have provided you with a service and will expect to be paid, legally I cant see anyone finding this unfair, as you would ordinarily have to pay it. BUT it does all depend on many different things.

Legally NEVER fight on the basis of principle, you will loose.

That is an opinion stated as fact, I get it, sorry, but really you need to think about it, if they buy your house for what you want, and you have to pay them, is it really a big deal? You don't have any of the hassle of ironing bedding, making coffee and bread, and watching a succession of nosy bastards wander round your house tutting when they have no intention of buying, depending on the price, I would say you're onto a winner, and should count yourself lucky.

But I would try and screw the agent to knock a few quid off as well.

thank you Boboff,
I understand what you are saying, I just am a little aggrieved at the fees as if I wasn't tied in with the agent I could sell the house without estate agent fees and just incur solicitors costs. I understand that they (the agent) provided us with a tenant, however in order to get the tenant there were significant initial costs. my partner and I have built up a good relationship with our tenants and it is a strong factor in to them wanting to buy. we do feel lucky that they want to buy and like you say it stops the worry of when we will sell and the factors of being nice to potential buyers etc. however we are not lucky in other ways so if I tried to do things sneakily then there would be a high percentage that we would shafted, I will get in touch with the agency and see if I can negotiate with them. I was just wandering if there was any loophole that would have been of benefit, thank you again

Good luck. Let us know how you get on!

Almost two years ago my wife and I became accidental landlords to buy are dream house, It's now time to sell the rented property to fund the work on our current house.
We have rented using a letting agent and have had the same tenants from the start, last time I spoke to the tenant they did show some interest in buying. I have checked my Agency agreement and under sale of property it states:

By agreeing to these terms of business you confirming that, in the future, if we introduce a buyer and/ or negotiate with a buyer for the sale of your property, you will pay us a selling fee based on 1.75%(+vat) of the total selling price ( or other consideration) payable for your property such selling fee being payable at the event of exchange of contracts ( to be paid at completion or on demand if completion is delayed for 6 months or more).

I am a little confused over this statement as I've only used this letting agent only for letting, and now I want sell they also want more money. I have done some research and on 'The Property Ombudsman' Section 3j Under Fair Contracts it say's :

Not require payment of a commission in circumstances where the tenant agrees to purchase the property unless this is subject to a separate sales agreement.

I have a meeting with the letting agent next week and I am not really sure where I stand?
Is this contact legal? Do I need to pay the agent a selling commission?
Any help would be appreciated.

Is the agent registered under the "TPO" scheme, if not, the Ombudsman's not going to be helpful.

Strictly speaking, they haven't "introduce[d] a buyer and/ or negotiate[d] with a buyer for the sale of your property".
But they did introduce someone who has now become a buyer.

However, it can't be that wide - lot's of people might have become buyers over time.
There must be case law on this - it must be a fairly common occurrence, so maybe a solicitor is the way to go.
If there's a "normal" way this gets sorted, it might be helpful to know that.

I've got a similar clause in my agent's contract, so I'd be interested to know what the exact position is.
It's fairly common, and I'd just accepted it as part of the cost of doing business.

If you raise it with the agent, they're going to want the percentage (daft of them not to).
If you don't they'd be equally daft not to ask for it anyway (unless they can't because the clause is unfair).

Depends how much the 1.75% represents and how much you both want it otherwise.
It's still cheaper than an estate agent...

Hi and thank you to everyone who replied, I took advice from this thread. In order to keep up good relations with the tenants my partner and I discussed with them fees and issues surrounding them wanting to buy. From this discussion we proceeded to go to the agency 11/03/14, thanked them for technically introducing a buyer etc, and pleaded with them to waive this fee as in terms of contract as it would be a strong factor in to the sale of house going through (emphasised it would be a deal breaker), to my amazement after deliberation they decided to waived this fee. They did however say say that they would get fees off the prospective buying tenant, so the agency is not going to miss out all together! thank you again for your help and advice.