Landlord wants to go private - advice

UnsureTenant

Hi,


I've rented a flat through a letting agency for the past two years. I've had infrequent contact with my landlord directly for any issues. The agency seem to act only as a rent forwarding service and to draw up the tenancy agreement at the start of each year.


My landlord has told me he is frustrated with the agency because they keep taking a cut of the rent each month which he doesn't feel they are entitled to anymore. I would agree with him generally. He is of the impression that after the first couple of years with the same tenant, they should no longer be taking a cut of the rent, but apparently they are unwilling to negotiate with him. He manages the property himself and I've always contacted him directly when necessary.


So he has asked me if I would be willing to tell the agency I'm moving out, and then enter into an agreement directly with him as a private landlord. He tells me that the rent will be the same, terms will be the same and deposit will be the same. Nothing will change apart from I pay my rent directly to him and of course he gets it all now...


Part of me thinks it's a bit cheeky because he will get more money out of it, and he has made it clear that the rent will not decrease. I do agree that it seems stupid that I'm paying the agency every month when they don't do anything; he handles everything himself as far as I can tell. Am I missing anything the agency are doing or would argue they are doing? I know they draw up the tenancy agreement, but I have to pay a fee for that every year anyway outside my rent!


Can anyone offer any advice on the situation? My landlord has suggested that my options are either to recontract with him, or move out because he's going to change the agency or go private anyway. I'm not against going down the private route (I've rented privately before) and I do trust him from my dealings in the past. I'm just anxious I may be overlooking something.


The other thing I'm not sure about is that we only just signed a new tenancy agreement last month. It's 12 months with a 6 month break clause, so does that mean that we actually can't do anything for 6 months anyway? Or if both parties agree to cancel can we do that? I'm really not sure how these things work. If I didn't want to do what he's suggesting am I right in saying he can't force me to leave for at least 6 months as part of his side of the agreement, as I haven't broken any rules and always paid my rent?


Any help or advice is much appreciated.


Thanks

agrinnall

I'd stay out of it, it's up to him to extricate himself from the contract with the LA, from your perspective the only change should be that you'll pay the LL direct rather than via the LA. I doubt if he will issue you a notice to quit (which as you say he can only do at defined points in the tenancy anyway) when you're a good tenant and he runs the risk of a void period that would wipe out any extra he'd make from ditching the LA.

G_M

UnsureTenant wrote: »

Hi,

My landlord has told me he is frustrated with the agency because they keep taking a cut of the rent each month which he doesn't feel they are entitled to anymore.
seems reasonable

So he has asked me if I would be willing to tell the agency I'm moving out,
why?
and then enter into an agreement directly with him as a private landlord.
you already have an agreement directly with him - it's called a 'tenancy agreement'.

The contract he has with the letting agency is between him and them - you are not a party to it.

He tells me that the rent will be the same, terms will be the same and deposit will be the same. Nothing will change apart from I pay my rent directly to him and of course he gets it all now...
fair enough

Part of me thinks it's a bit cheeky because he will get more money out of it,
but he will have more work and responsibility. Currently he pays the agency to perform a service for him. After the change he will have to take responsibility for this service himself.

You, on the other hand, will have no lesser or greater rights, obligations or expenses, so why should your rent change?

Am I missing anything the agency are doing or would argue they are doing?
I have not seen the contract between your LL and the agency so have no idea what functions they perform other than rent collection which you have mentioned. That alone is a function, especially in cases where the tenant defaults and needs chasing. I accept this may not apply to you, but it is probobly a responsibility the agent is contractually obliged to undertake.

Can anyone offer any advice on the situation? My landlord has suggested that my options are either to recontract with him, or move out because he's going to change the agency or go private anyway. I'm not against going down the private route (I've rented privately before) and I do trust him from my dealings in the past. I'm just anxious I may be overlooking something.
The decision to 'go private' is really nothing to do with you (see above). frankly I wonder why he is asking your 'permission'. Yes, he is wise to inform you, and explain the implications. But beyond that you are not involved.


The other thing I'm not sure about is that we only just signed a new tenancy agreement last month. It's 12 months with a 6 month break clause, so does that mean that we actually can't do anything for 6 months anyway?
So you are safe from eviction till the Break Clause is implemented. And I see no reason why the LL should evict you if you are a good, paying, tenant and he wishes to continue to let the property.

This does not stop the LL 'going private', subject to any terms in the contract he signed with the agency.

Thanks

This post aimed at landlords may also help explain:

Letting Agents (Tips for selecting, and tips for sacking them)

jjlandlord

UnsureTenant wrote: »

Part of me thinks it's a bit cheeky because he will get more money out of it, and he has made it clear that the rent will not decrease.

No, you are a bit cheeky to suggest you deserve a cut.

Are you owed a discount whenever a company you are a customer of sacks an employee?
It's the exact same situation.

DaftyDuck

So, what's in it for you? There is the risk of at least some fuss over telling the agency you are leaving when you are not, and you leave yourself open to pressure from LL. He gains more rent for your cooperation. You get nowt! He may have to manage the tenancy himself, but his choice to do so.

OK, he won't offer a rent reduction, but what else might you want? A longer/shorter contract, a new fridge, better bedroom heater....

I am a LL, and I would at least offer you something, or ask what you'd like. I seem to be out of step with some of the other LL here but, in my experience, being mutually helpful is key to an easy - and profitable- life.

Yorkie1

As G_M says, this is the LL's problem and not yours at all.

The reason he's involving you is because in order for him to get out of his contract with the LA, you have to have left as a tenant. Hence the subterfuge he's asked you to go through.

I'd want to know what happens when the LA wants to go through its 'usual check-out procedure' after you've left. i.e. checks the property to see its condition to ascertain whether you are entitled to your deposit return.

Of course, the LL can instruct them not to do it, but it's quite a high risk strategy.

However, it does cross my mind that if the LA clocks what's gone on, the LL will effectively have got out of their contractual obligation to pay the LA through fraud, to which you'd be party.

Old_Git

can you ask for a rent freeze for 2 years .

jjlandlord

Yorkie1 wrote: »

However, it does cross my mind that if the LA clocks what's gone on, the LL will effectively have got out of their contractual obligation to pay the LA through fraud, to which you'd be party.

There's no fraud.

What can happen depends on the wording of the contract between landlord and his agent.

It might be that it is worded such that if the tenant terminates his tenancy then the agent is no longer due his commission.
If so, what the landlord proposes is a perfectly legitimate way to end his liability, though I guess he should offer something to his tenant for the trouble (a lump sum seems the most appropriate).

It might be that the contract is worded such that the agent is due commission as long as a tenant found by him remains at the property (taking into account the limitations from the Foxtons case).
If so, what the landlord proposes will fail as soon as the agent realises that he has granted a new tenancy to the same tenant.

Elfbert

The last flat I rented I found through a letting agency, and when I signed up they told me they managed the property too.

I then met the landlord, who was lovely, and told me it was the first time he'd ever been a landlord. He had lived in the flat for a while, and was now moving in with his partner.

Being a landlady myself I sat him down and told him he'd be far better off if he just managed it himself, and didn't pay the agency to do it. I also explained I would rather contact him direct if things needed fixing than go via a third party, which in my experience always wastes time. Anyway, he agreed, we got along fabulously for the 4 years I rented from him. Eventually I phoned him and said we were very sorry to be leaving him, but we were buying our own flat - and he said he'd been wanting to sell the flat, but hadn't wanted to ask us to leave! So the whole experience was fantastic, got full deposit back with no probs, despite us having damaged a worktop quite badly, because he said he was so glad we'd been such good tenants

Was the only positive experience I'd ever had with a landlord!

I agree that I don't see what it has to do with you, whatever he's agreed with the agents though. It's his problem to get out of that, you shouldn't have to lie about it

Twiggy_34

Overall I agree with everything G_M has stated. However, like DaftyDuck I am also a LL and agree with his suggestion that there's no harm in seeing if you can get something out of the arrangement. I'd be inclined to avoid getting involved in the scenario between your LL and the LA, and if he can't get out of the contract within the existing contract I think it would be reasonable to discuss this with your LL and agree to him changing to a private landlord at a time when he can without compromising you in any way. I would certainly suggest discussing things further with you LL, yes there will be more work for him in the long term, but you can work together to minimise the hassle. I.e. You could look into the option of a periodic tenancy where the contract doesn't have to be renewed beyond the initial term saving you both bother on an annual basis. This suggestion alone could give you some leverage to suggest that you split the difference on what he was losing to the LA (not 50/50 necessarily, but enough to make it worthwhile for you both). He would of course be fully entitled to refuse the request, but I don't see that there is any harm in asking. There's also the suggestion from another poster that you ask him to freeze the rent for a period of time which is another viable option, but perhaps you could save that as a plan B if the split the difference suggestion is rejected.

UnsureTenant

Thanks all for the replies.

To clarify, I was not expecting a rent decrease; it just goes back to the question "what's in it for me". At the moment I pay my rent and I don't worry about it. I don't want anything more or less. The proposal to sort of lie to the LA and tell them I'm leaving makes me feel uneasy.

It's clearer to me now that the tenancy agreement is distinct from the landlords agreement with the agency. That was something I wasn't sure of before. Of course I have no idea what his terms are, and I really want to avoid getting involved. I feel like he's putting me in an awkward situation.

Really I just want to minimise the hassle. I don't want to move out. I don't want a rent decrease or anything else really, just an easy life...

He has told me that he doesn't want me to leave and that I'm a "good tenant", however given the type of property and the location, I don't think he'd have any trouble re-letting it quickly. So I don't think that puts me in a very good place for any bargaining.

Once we get to six months, he can terminate the tenancy anyway so maybe I should just offer to go along with whatever private tenancy agreement he wants after that point? That means I don't have to do anything, except trust him that he will keep me on as a tenant after the two months notice.