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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22400
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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Hi Here is a summary of my problem: 1. I had rented property

Customer Question

Hi
Here is a summary of my problem:
1. I had rented property out to tenant through estate agent under a fully managed scheme in England
2. He stayed at property for 24 months
3. I took over management of the property at the end of this
4. Tenant had expressed a wish to buy the property.
5. He made me an offer that was acceptable and contracts exchanged.
6. The sale was made 7 days into the period when I was managing the property and had severed all ties with estate agent for management
7. Estate agent is now claiming 1.5% fees for the sale.
8, The wording in the contract is as follows: "Should at any time after the commencement of the tenancy unconditional contracts for the sale of the property are exchanged with the tenant, the agency will be entitled to a commission of x% plus VAT."

Does this mean I am liable even if the contracts were exchanged when the agency was no longer managing the property? Where do I stand please? Thanks very much for your time and advice
Submitted: 3 years ago.
Category: Law
Expert:  Stuart J replied 3 years ago.
How long after taking over the management was the offer made?
Customer: replied 3 years ago.

Hi


DIscussions about buying the property started when the property was being managed by the agent. Offer was also made when the property was under the agent's management

Expert:  Stuart J replied 3 years ago.

Does the agent accept that there is nothing due in respect of the property mgt, and that they are simply claiming because it is sold?

Why did you take over the mgt?

Customer: replied 3 years ago.

Nothing due in management fees. In fact the first tenant did not pay me the last months rent and they let the tenant vacate the property without paying. Have all paperwork to show this. They did nothing to help me with it. Was essentially unhappy with their services, hence took over management

Customer: replied 3 years ago.

Thought of a few more points as there was a tenant before this chap, which was when the contract was signed with the agent. The timeline may also be relevant

1. First tenant in Sept of year 1 for 12 months,when the contract was signed. I have signed nothing else with the agent after this. SO the first contract has been extrapolated (correct terminology??) to the second tenant

2. Two months empty property (Sept and Oct year 1)

3. Second tenant in October of year 2 for 12 months until September year 2; new contract signed, but there was no page regarding selling information sent to me with the second contract (sent by email)

4. From September year 2, this was extended on a 3 monthy basis
as the tenant was not sure regarding his long term job status in the region

5. This was when the discussions and offer to buy the house took place.

Expert:  Stuart J replied 3 years ago.
So the only ref to the selling fee is in the 1st contract, not the second contract which is the one that introduced this person?
Customer: replied 3 years ago.

That is correct. The first contract was signed in 2009. The second person was also found by the agency, but no contract was signed especially for the second tenant (who bought the house). Before selling, I asked for a copy of the contract (sent to me by email hence has a date/time stamp etc) and this page was not there on the email. So I felt comfortable selling the house without repercussions.

Expert:  Stuart J replied 3 years ago.




The word you were looking for, for the contract is "novated", ie replaced with
a new one. I don't think you can be bound by a contract with a term in which
has been replaced with a contract without the term in that they want to rely on.

Assuming it is under £5k I wouldn't be paying anything and letting court
decide. It will be small claims under £5k so the worst that can happen is you
have to pay the sum (if you lose for some reason) they claim plus court fees.
They don't get solicitors cost back in small claims court generally



Can I help further?



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Customer: replied 3 years ago.

No worries regarding delayed responses. Just to clarify:

1. The previous contract will not apply to the new tenancy unless another one has been specifically signed and "novated".

2. Although the house was sold when I was managing the tenancy, do you think because the offer was made during the time they were managing it, they still have a claim?

3. I got a bit confused with the chronology: I signed the contract with them in year 1, but the property in year 1 was let out by another agent. The property then went on the market again when the first tenant left, and the agent in question found the tenant. They used the contract I signed in year 1 to manage it in years 3 and 4.

 

Would be grateful if you can address these points.

best wishes

Expert:  Stuart J replied 3 years ago.




1 On your original facts the new agreement with the agent
supercedes the old one they want to rely on. But see 2 and 3 below

2 You
said that they were managing it but you said that at that time it was under new
agreement with no sale commission clause in. That seems to conflict with what
you now say in 3



3 If
there has only been one contract with this agent, then they can probably
enforce that term.



If that is correct and you would rather make them an
offer, I can tell you how to deal with that to prevent them coming back for
more



Customer: replied 3 years ago.

So sorry I got my facts wrong:


1. There has been only one contract with this agent. They found the tenant a full 2 years after the contract was signed.


2. What worries me is the wording ""Should at any time after the commencement of the tenancy unconditional contracts for the sale of the property are exchanged with the tenant, the agency will be entitled to a commission of x% plus VAT."


3. The email attachment of what they sent me recently when I asked for a copy of the contract did NOT include the information about the fees.


4. I would greatly appreciate your thoughts on making them an offer


 

Expert:  Stuart J replied 3 years ago.

So did the contract that you signed include the phrase or not? What has the email got to do with it?

If you had the original contract why did you ask for another?



In cases like this, I never suggest making an
offer. I suggest sending a cheque. Armed with a cheque in the hand for some of
the amount they want, compared to an argument over the whole of the amount,
(and arguments. They may win or lose) the cheque in the hand is a pretty
powerful incentive to accept it.

So consider deciding how much you would like
to pay the (you need to make it attractive enough) and send it with a covering
letter headed "without prejudice save as to costs". That means that they cannot
produce the letter in court as any proof that you admit owing them any money at
all.



Tell them in the letter that you are offering
this money in full and final settlement of all claims against you, past,
present and future, and that by cashing it they accept it as such. Tell them
that if they do not accept it, they should return the cheque to you and if they
issue legal proceedings, you will defend them on the basis of A, B, C,
whatever.



Tell them that if they do not understand the
significance of the letter. They should take independent legal advice.



I can tell you this approach works nine times
out of 10, provided the offer is reasonable and not derisory.





For legal reasons which I will not bore
you with but which go back several hundred years, the cheque must not come from
you, but was come from a third party, friend, relative, solicitor, our accountant,
neighbour, girlfriend, wife, husband, whoever, just not from you.




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