Increase Fee with 14 days notice - can the letting agent do this?

Gurnam

Hello, I am experiencing a number of challenges with the current letting agency, the latest which has driven me to ask for advice is their recent increase in management fees for a fully managed service from 5% to 8% giving only 14 days notice to the landlord. However after querying this their reply was that the landlord would have to give 3 months notice if they want to change the terms of the fully managed service to a rent collection only service. Can the letting agency change the terms of a fully managed service mid a tenancy by increasing their fees and only giving 14 days notice and giving the landlord the option to give 3 months notice if they choose to change the terms of the service from a fully managed service to a rent collection only service, this seems somewhat unfair?

Any advice would be much appreciated.

bigisi

Gurnam wrote: »

Hello, I am experiencing a number of challenges with the current letting agency, the latest which has driven me to ask for advice is their recent increase in management fees for a fully managed service from 5% to 8% giving only 14 days notice to the landlord. However after querying this their reply was that the landlord would have to give 3 months notice if they want to change the terms of the fully managed service to a rent collection only service. Can the letting agency change the terms of a fully managed service mid a tenancy by increasing their fees and only giving 14 days notice and giving the landlord the option to give 3 months notice if they choose to change the terms of the service from a fully managed service to a rent collection only service, this seems somewhat unfair?

Any advice would be much appreciated.

You signed the contract, not us. What does that say about fee increases and notice periods?

Comms69

Depends on what your contract says, but a fundamental change like this could give the option to cancel the contract - ie if it went to court they may decide that the change in terms was enough to void the contract.


Does the contract allow a 60% increase in fees?

ACG

You are running a business meaning the contract is B2B. You do not have the same protection as in a B2C contract. That means consumer rights do not apply and so you have a choice, to either carry on paying, negotiate or stop paying and see if they take you to court.

Personally, I would cancel the contract and tell them I will see them in court if they threaten it as I could not seem them bothering for the sake of 3 months payments and even if they did go to court, I am sure you could argue it is weighted too far in their favour making it unfair... But that is me and I am not a legal professional.

You need to consult a solicitor really. You may have legal cover on an insurance policy where you can get some basic advice free of charge?

Going forward, you need to realise this is a business and you need to read and understand the contracts you are signing and negotiate anything you do not like before signing it. Also, do not trust what people say. A prime example, we invested in a new IT system earlier this year. The conversation effectively agreed we tied in to a 12 month contract, the paperwork came through as a 3 year contract. I corrected this before signing it. After 8 months we decided not to stick with the IT system as it was not as described. The company allowed us to leave after 9 months with no further payments (Which was pretty good of them) but they could have held me to the 12 months and if I had not read the contract, they could have held me to another 27 months.

Bossypants

You may be stuck paying the increase for the three months depending on the terms of your contract, but I would be firing them immediately after a stunt like that, not looking to retain them on a lesser contract. If they are treating their paying client like that, imagine how they are treating your poor tenants!

need_an_answer

On the plus side a fully managed fee for a single property at 8% is still not a bad price if you like the fully managed route(I personally don't but that's my choice)….I have seen some fully managed recently that have been 10% or as high as 12%.

If you are looking at a rent only collection going forward then why not opt out entirely and just just go for tenant find only which is usually half the first months rent plus vat.....

Rent collection has always seemed money for old rope to be for the managing agent as its just collating the rent and passing it on to you when in practice all the tenant needs is your banking details to make a monthly standing order payment.

G_M

Just to add, see the sticky:


* Letting agents: how should a landlord select or sack?