Giving notice to agency company

Tufa

Hi everyone,

We are due to complete our house purchase in December and need to move out from the current tenancy as well, however under the break clause, we have this:
"If the Tenant shall determine the tenancy hereby created pursuant to the provisions of Mutual
Break Clause above the Tenant shall on demand pay to the Landlord a proportion of the legal
costs and or lettings agents fees incurred by the Landlord in connection with the creation of the
letting such proportion to be a calculation based on the ratio that the unexpired term of the
tenancy bears to the length of the period from the commencement of the term to the date at
which the notice of determination takes effect"

The agency confirmed, this is 10% of the monthly rent + vat and due to be paid to the estate agent, not the landlord.
This is a 3 year contract, the anniversary is in May so they will ask for 5 months worth of fees.

This fee is near £1000 so before I go ahead and pay, just want to double check if this is legally accepted as far as I remember now agencies can't charge any fees to the tenant?
Don't want to fight with them, this was an unplanned purchase, we were planning to buy just after this agreement expires however circumstances changed and we were able to afford it earlier.. So when we made the purchase, I was aware of this cost as well...

Comms69

Agencies can still charge fees; however I don't think that break clause is valid. Unless the LL version pays you an equivalent value?

Tufa

This is the full break clause:

5. Break Clause
Any time after four months of the initial fixed term of this tenancy (or after a similar period
following a fixed term extension to the original tenancy) the tenant may invoke this break
clause by providing a minimum of two months written notice to the landlord (such notice to
expire on the last day of a rental period of the tenancy). Any time after the fourth month the
landlord may give the tenant two months written notice. At the end of such notice the tenancy
shall end and all obligations and responsibilities shall cease; subject nevertheless to any claim
by either party against the other in respect of any breach of any of the terms and conditions of
the agreement.
If the Tenant shall determine the tenancy hereby created pursuant to the provisions of Mutual
Break Clause above the Tenant shall on demand pay to the Landlord a proportion of the legal
costs and or lettings agents fees incurred by the Landlord in connection with the creation of the
letting such proportion to be a calculation based on the ratio that the unexpired term of the
tenancy bears to the length of the period from the commencement of the term to the date at
which the notice of determination takes effect

This is a Assured Shorthold Tenancy, 3 years contract starting from the 19th May 2018 (in case if this matters in any way)

Comms69

Tufa wrote: »

This is the full break clause:

5. Break Clause
Any time after four months of the initial fixed term of this tenancy (or after a similar period
following a fixed term extension to the original tenancy) the tenant may invoke this break
clause by providing a minimum of two months written notice to the landlord (such notice to
expire on the last day of a rental period of the tenancy). Any time after the fourth month the
landlord may give the tenant two months written notice. At the end of such notice the tenancy
shall end and all obligations and responsibilities shall cease; subject nevertheless to any claim
by either party against the other in respect of any breach of any of the terms and conditions of
the agreement.
If the Tenant shall determine the tenancy hereby created pursuant to the provisions of Mutual
Break Clause above the Tenant shall on demand pay to the Landlord a proportion of the legal
costs and or lettings agents fees incurred by the Landlord in connection with the creation of the
letting such proportion to be a calculation based on the ratio that the unexpired term of the
tenancy bears to the length of the period from the commencement of the term to the date at
which the notice of determination takes effect

This is a Assured Shorthold Tenancy, 3 years contract starting from the 19th May 2018 (in case if this matters in any way)

Well it matters in terms of you owing a heck of a lot of money potentially! Why did you sign a 3 year contract if you were buying a house?!


- By my calculations: 10% of the month rent, (say £500?), for a period of 28 months *1.2 is going to be £1680.


(Rent /10) * (months left) *1.2.


But I given it is an unequal break clause I would argue it is invalid and against the spirit of the break clause.

G_M

There 2 reasons why I believe you do not hav to pay this fee:

1) a Break Clause must treat both sides equaly. In this case the tenat is being made to pay a fee for implementing the BC, but there is no equivellant fee if the LL implements the BC

2) "At the end of such notice the tenancy
shall end and all obligations and responsibilities shall cease". This contradicts the subsequent section regarding the fee.

Tufa wrote: »

This is the full break clause:

5. Break Clause
Any time after four months of the initial fixed term of this tenancy (or after a similar period
following a fixed term extension to the original tenancy) the tenant may invoke this break
clause by providing a minimum of two months written notice to the landlord (such notice to
expire on the last day of a rental period of the tenancy). Any time after the fourth month the
landlord may give the tenant two months written notice. At the end of such notice the tenancy
shall end and all obligations and responsibilities shall cease; subject nevertheless to any claim
by either party against the other in respect of any breach of any of the terms and conditions of
the agreement.
If the Tenant shall determine the tenancy hereby created pursuant to the provisions of Mutual
Break Clause above the Tenant shall on demand pay to the Landlord a proportion of the legal
costs and or lettings agents fees incurred by the Landlord in connection with the creation of the
letting such proportion to be a calculation based on the ratio that the unexpired term of the
tenancy bears to the length of the period from the commencement of the term to the date at
which the notice of determination takes effect

This is a Assured Shorthold Tenancy, 3 years contract starting from the 19th May 2018 (in case if this matters in any way)

Having said that, you are clearly heading towards a dispute. You could serve your notice refererring to the BC, wait out the 2+ months to the end of the 2nd rental period, return the keys and leave.


At some point (during the notice period or after) the LL/agent is going to bill you. If you don't pay, a deduction will be made from your deposit. You will then have to either
* contest the deduction via the deposit scheme (deposit IS protected yes?) or
* go to court


Of course, there is the old adage "possession is 9/10th of the law". If it is the LL/agent trying to claim off you, not you trying to claim your deposit back off them, then you have 'possession' of the money in dispute and the ballis in their court. Now how could you put yourself into a position where they hold none of your money.........?

Tufa

Have to pay only up till the first aniversary, so till May, 5 months.

As I have mentioned, in April when we signed the contract we were planning to stay until the end of tenancy however in June both our salaries increased to be able to afford a mortgage , we also got a big sum of money for the deposit and a flat came up we really liked so decided to go ahead.

My rent is £1430, it's a London rent so due to pay £860 for this 5 months.

Worth to try CAB and get their advice as well if we can argue this fee?

SmashedAvacado

You don't have a contract with the agent - you have a contract with the landlord. you don't have to pay the agent anything. If the agent bills the landlord and the landlord pays the agent, then the landlord might have a claim against you. This is questionable.

Comms69

Tufa wrote: »

Have to pay only up till the first aniversary, so till May, 5 months. - It doesn't say that anywhere

As I have mentioned, in April when we signed the contract we were planning to stay until the end of tenancy however in June both our salaries increased to be able to afford a mortgage , we also got a big sum of money for the deposit and a flat came up we really liked so decided to go ahead.

My rent is £1430, it's a London rent so due to pay £860 for this 5 months. - Why do you believe this is the case - I agree with G_M about it being invalid and the reasons why - but cant work out why you think that?

Worth to try CAB and get their advice as well if we can argue this fee?

Sure and ask Bob down the pub too; You'll get either the same answer, or different ones.


Ultimately it will depend on what a court agrees with. Assuming you say what you've been told here I would expect them to agree with that.


I do think that they will try to claim the full amount, IE £5k

G_M

As Smashed says, your contract is with the LL and that's who notice should be served on (at the address "for serving notices".


And that's wo any dispute will be with (from a legal standpoint).

Comms69

SmashedAvacado wrote: »

You don't have a contract with the agent - you have a contract with the landlord. you don't have to pay the agent anything. If the agent bills the landlord and the landlord pays the agent, then the landlord might have a claim against you. This is questionable.

Not strictly true.


The contract is with the landlord, but who gets the money is quite clear.

Tufa

They told me in their last e-mail:

"With regards to ending the tenancy early, you have a break clause whereby you may give a minimum of 2 months’ notice to end the tenancy at any point after 4 months’ into the term (this means the earliest date you can give your notice is on 10th September 2018 to end your tenancy on 9th November 2018). Please note, this notice should also expire on the last day of a rental period which is the 9th of a month in your tenancy – for example, if you gave notice on 20th September, the tenancy would end on 9th December by ending on the 9th and giving at least 2 months’ notice.



Your tenancy also states on page 3 under clause 5 that should you invoke your break clause, you will be liable for agency fees which your landlord pays for the whole tenancy. These fees would be up to each annual period of the tenancy. This is calculated based on the number of months’ you are ending your tenancy early (up to each 12 month period). Your landlord pays 10%+VAT of the rental income for the tenancy annually in advance, you would therefore be liable for this fee for each month you are ending the tenancy within this annual period. For example, if you ended your tenancy on 9th December 2018, this is 5 months’ earlier than the end of this annual period. 5 months’ worth of rent is £7,150.00, and 10%+VAT of this is £715.00+VAT."