Help!! is this LA contract dodgy?

krissy08

I am a newbie landlord, not at all happy with my LA. I PAY 10% mgment fees per month and everytime they have sent someone to fix a problem at the house, I have been quoted way over the odds. This last time I got another quote £300 lower than theirs. Unbelievable!!. I have now decided to part ways with them and was told when i signed that this would require a 4 week notice by myself to them. I have however come across a part in my contract that reads;
Cancellation charge;

In the event that this agreement is cancelled by yourselves prior to thje arranging of a tenancy an admin. dharge of £50 is payable. If the agreement is cancelled during the period of tenancy with a tenant in occupation, then full management fees will be payable until the end of the occupation/lease with that tenant, whichever is longer.
My questions are; is this legal? does this mean if I sack them and the tenant remains I have to carry on paying the them regardless?
Can they continue to charge me after our contract ends?
.
Secondly concerning the last job, I WAS FURIOUS when I found out the difference in cost, what is the point of the having a LA, now they are charging me a £70 callout charge even though I am going with someone else. I feel bullied is this legal, all he did when he got there was switch off the hot water. I feel really suckered they told me they belonged to an association called AFTA, just googled it and nothing is coming up.
Any tips welcome

poppy10_2

krissy08 wrote: »

If the agreement is cancelled during the period of tenancy with a tenant in occupation, then full management fees will be payable until the end of the occupation/lease with that tenant, whichever is longer.

Surely an unfair contract term. Try posting on landlordzone forums, they'd know more about this situation.

Troubled_Joe

On the face of it it's a contract term that you've agreed to. I'd disagree that it's unfair. The courts' threshold for this is particularly high in commercial transactions such as this.

moneysavinmonkey

krissy08 wrote: »

I feel really suckered they told me they belonged to an association called AFTA, just googled it and nothing is coming up.
Any tips welcome

ARLA is the association of letting agents so surely a spelling mistake?

If not then is this not something you should of checked before you signed a contract of business with them....sorry this isn't particularly helpful to you at this stage!!

Is there anything in the contract about that will allow you to break it as they have not upheld their side - e.g. they were supposed to get competitive quotes etc. if they have broken the contract then they can't charge you a cancellation fee.

As far as I know it is still up for debate whether charging for the tenant after the contract is cancelled is allowed or not. The Office of Fair trading are prosecuting a test case against Foxtons but I'm not aware of the outcome yet.... see: http://news.bbc.co.uk/1/hi/business/7264451.stm

tbs624

For a summary of some of the LA terms that the OFT are looking at see here:http://www.riky.co.uk/more_info.asp?current_id=329 No.5 could be useful. Agree with MSM - trawl back through the other small print and see if there is anything that you think would constitute a breach of their contractual obligations to you. Are your current tenants on a Fixed Term contract?

tbs624

moneysavinmonkey wrote: »

ARLA is the association of letting agents so surely a spelling mistake?

..and there is also this one as a possible: http://www.ukala.org.uk/ You can search at either to see if they are members.

nutmegman

krissy08 wrote: »

If the agreement is cancelled during the period of tenancy with a tenant in occupation, then full management fees will be payable until the end of the occupation/lease with that tenant, whichever is longer.

If you dont pay you are in breach of contract and thier claim would be for the management fees they expected for the duration of the tennant in the property. This would be a reasonable claim and would include loss of profit etc.

However, you should have the right within the contract to cancel the agreement subject to lack of performance or frustration.

It would usefull if you would post the full termination clause so i can review it for you

krissy08

Hello nutmegan,
Thanks a lot for your feedback. The above quote is all it says under cancellation, the only other reference it makes is where it says;

xxx will be letting agents from the date of this agreement for a period of 4 wks and thereafter until terminated in writing by either party giving 14 days notice. Should the propty be let during our agency period., all fees will be payable to XXX irrespective of the introducer.During the period of agency the LL will not instruct any other agent to let the property. The right is specifically reserved to terminate this agreement at any time if the terms and conditions are unacceptably changed by the landlord or become unacceptable to XXX. THE CANCELLATION FEE AS OUTLINED would then become payable.
Hope this helps

nutmegman

It is difficult to advise without knowing the full circumstances or reading the contract, anyhow I would try the following;

It seems to me as this is a management contract, letting agent obtains a tenant then charges you 10% per month for a managed service.

You have the right the cancel the agreement subject to 14 days notice, if you give them 14 days notice then you will have terminated the contract, do this in writing...

Then you have the issue over the charges for cancellation, this is difficult to advise, who found the tennent? how long is left on the tencancy agreement?

can you post me the clause where you commit to paying 10% management fees?

Thanks

krissy08

Thank you. Here goes
Fees and commisions;
We agree to pay XXX an arrangement fee of £195 for arranging this tenant, serving notices, preparation of lease&taking of references) for the initial period. In subsequent periods an arrangement fee of £100 shall be payable in the event that the resident tenant undertakes to renew the tenancy for a further period. In the event of a new tenant £150 shall be payable. We agree to pay XXX a comission of 9.5% of the calender monthly rent, for collecting the said rent for the initial and subsequent periods.
All fees are subject to VAT at the current rate.

krissy08

oh the tenancy agreement was the Assured shorthold one signed initially for 6 months then onwards on a rolling basis I think as I haven't signed anything since September when she moved in.