HMO Letting agency wants termination fees incl all vacant rooms!

Freedommm

I want to terminate with this agency due to their very low performance, that is about 75% of rooms have been vacant for months and they get 1 viewing per month for all of them combined ( and that's only when i chase them).  Essentially, they are not performing.
They made me sign a new 2-year agreement, after initial one expired the 2 year minimum. It turned out there are clauses in fine print that mention termination fees +VAT "per property" even if vacant. The contract is for the entire HMO House, but they are saying the meaning of "per property" is actually "per room" - which means multiple of the amount, even though most rooms are vacant.

Is there a way to terminate without those steep charges? What should I do?

theartfullodger

How  "...made me sign..." please?

Gun to head, locked you in a cell? Some other form of coertion?

Did you not read the agreement before signing?

Artful, 76, no recollection of ever being "made" to sign any agreement, ever. In several legal systems.

Best wishes to all.

BarelySentientAI

Are the lets per room, the rent per room, and the agency commission per room?  That would match with one room being one property.

If so, then the termination fees being per room would seem to follow.

I would expect termination fees to apply to both occupied and vacant rooms - you're not doing anything that affects the tenants so occupation is irrelevant.

I'm not a landlord or a lawyer though.

anselld

In most people's common understanding "per property" would mean per whole house.   It is certainly ambiguous if it is intended to mean per room and in contract law any ambiguity settles in favour of the party who did not draft the contract, ie you.

It also seems odd that it is a fixed fee rather than a percentage of rent.  If it were stated as a percentage of rent then there would not be a room/house argument.

I would be inclined to pay them "per property" and tell them they are terminated and that if they want more you will see them in Court.

propertyrental

Am I right in assuming they take a % of each tenant's monthly rent? If so, I'd expect them to be keen to keep the property (sorry rooms) occupied.

Or have you agreed some other payment arrangement in your contract with the agent?

tacpot12

Good advice from anselld. I would be inclined to check the terms of agreement for any definition of what a property is, or what "the property" is. If the property is described as a HMO with x rooms, then it is one property. If it is described as a list, e.g. "Room 1, X Street", "Room 2, X Street", "Room 3, X Street",etc. then it is more than one property.    

Freedommm

tacpot12 said:

Good advice from anselld. I would be inclined to check the terms of agreement for any definition of what a property is, or what "the property" is. If the property is described as a HMO with x rooms, then it is one property. If it is described as a list, e.g. "Room 1, X Street", "Room 2, X Street", "Room 3, X Street",etc. then it is more than one property.    

Thanks, @anselld Much appreciated! 
I checked the specific details! The contract has an initial section with clearly just the address of the entire house. There is no list of individual rooms on that page. Furthermore!!! Under Definitions, there is a specific clause that clarifies that property means exactly as named in that initial section. Again, no mention of individual rooms here.
I now think that they have no legal claim that termination fee "per property" means anything other than that! Even if they would let those rooms individually  - those tenant contracts are separate to the one discussed here!

Am I correct then?

BarelySentientAI

With that new information, I think you're right.

propertyrental

Post 9: Letting agents: how should a landlord select or sack?

born_again

anselld said:

In most people's common understanding "per property" would mean per whole house.   It is certainly ambiguous if it is intended to mean per room and in contract law any ambiguity settles in favour of the party who did not draft the contract, ie you.

It also seems odd that it is a fixed fee rather than a percentage of rent.  If it were stated as a percentage of rent then there would not be a room/house argument.

I would be inclined to pay them "per property" and tell them they are terminated and that if they want more you will see them in Court.

While it maybe to you & me, who are not letting out rooms in a HMO. This is the whole point of reading any T/C before signing anything.
Never assume what they are saying. If not sure ask.

_Penny_Dreadful

Freedommm said:

I want to terminate with this agency due to their very low performance, that is about 75% of rooms have been vacant for months and they get 1 viewing per month for all of them combined ( and that's only when i chase them).  Essentially, they are not performing.
They made me sign a new 2-year agreement, after initial one expired the 2 year minimum. It turned out there are clauses in fine print that mention termination fees +VAT "per property" even if vacant. The contract is for the entire HMO House, but they are saying the meaning of "per property" is actually "per room" - which means multiple of the amount, even though most rooms are vacant.

Is there a way to terminate without those steep charges? What should I do?

Given the state of the current rental market in the UK I am very surprised that not only do you have most of the rooms sitting vacant but that you are hardly getting any viewings at all.  I recently advertised one of my properties in Aberdeen where the housing market is bucking the trend in the rest of the UK and I had more viewings and offers in a week.  

I can't see your contract with the letting agent but I presume it has some of the usual clauses whereby the letting agency is paid a monthly fee which equates to a certain % of the rent.  If the rooms are not being let then the letting agency is not making any money from your property which sound like an odd way to run a business.  Either the letting agency is completely incompetent or there is something wrong with the property as it is not attracting tenants during what some are calling a rental crisis.

Have you visited the property recently?  What feedback are the letting agency giving you from the viewings and/or lack of viewings?

If you are convinced the letting agent is beyond useless and that's why the rooms are not letting then raise a formal complaint with the letting agent.  Then if you are unsatisfied with their response escalate the matter to whichever redress scheme the letting agent is registered with.  If you make enough noise you might be able to demonstrate the letting agent is not keeping up their end of the bargain and be able to terminate the contract without penalty.