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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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Hi,We have a flat with tenants in, had been on a 12 month

Customer Question

Hi, We have a flat with tenants in, had been on a 12 month contract, we've all just agreed to go onto a rolling contract. The agency who did the initial finding of tenants and the contract, on a let only service is now billing me for 6 months of commision for the renewal of the contract. Are they legally allowed to do this? Does going onto a rolling contract count as renewal? And the tenants are planning on moving out before 6 months has passed anyway, so if they e.g. stayed for an extra 4 months, how on earth does that work in terms of the agency charging for 6 months up front? The terms of business say "With regard to the renewal/ extension of tenancies whether or not negotiated by our assingnees or us commission is payable at %." and "The total amount of commission due on a let only basis is payable at the commencement of each tenancy or renewal / extension." and "Fees are payable even if the Landlord dispenses with our service during the tenancy". Also, the agency said I signed this terms of business. As far as I remember, I did not. And their are no signatures of either myself or them on the copy of the Terms of Business I have. My memory is that I received this terms of bus. after the tenancy contract was in place, along with other docs. But of course if I say this is the case, they will argue that I received it pre. Although if I didn't sign it then they won't have the signed copy. And yes, I'm an idiot for not having read this little bit about the renewal. Being a novice landlord and having had a huge amount of stuff going on at the time. Please help!! Thank you very much.

Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.

Alex Watts :

Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

What do their terms and conditions say please about this?

JACUSTOMER-lbplocve- :

Thank you very much for looking at this.

JACUSTOMER-lbplocve- :

Thank you very much for looking at this.

JACUSTOMER-lbplocve- :

So it is their "Terms of Business"

JACUSTOMER-lbplocve- :

under 'Let only service', which is what we asked for, the relevant section, 'Fees', says: "With regard to the renewal/extension of tenancies, whether or not negotiated by our assignees or us, commission is payable at the following rates of the renewal rent, Year 2 7.5%. This reduction relates only when tenancies are renewed or extended to existing tenants. There will be no reductoin in fees if you had a discount at the commencement of the tenancy.

JACUSTOMER-lbplocve- :

that was point 2. Point 1 is "10% of the first twelve months rent" - we payed 8%.

JACUSTOMER-lbplocve- :

Point 4: "The total amount of commission due on a let only basis is payable at the commencement of each tenancy or renewal / extension."

JACUSTOMER-lbplocve- :

Point 5: "Fees are payable even if the Landlord dispenses with our service during the tenancy." We had not formally 'dispensed' with them, in writing or phone call, and had thought we would use them again when these tenants leave in a few months, but obviously will not be now, so I suppose we need to put it formally in writing.

JACUSTOMER-lbplocve- :

Point 6: "We reserve the right to retain any interest or commission obtained while carrying out our duties on your behalf."

JACUSTOMER-lbplocve- :

Doing some research on the internet re periodic contracts it seems people are saying that going onto a periodic contract is not the same as doing a renewal or extension. I'd like to think that was the case, so could argue that they do not say anything about 'periodic contracts' in their TofB, only 'renewal' and 'extension' but I think it is quite a fine line. 'Though technically it is not a renewal, because they are not signing a new contract for e.g. 12 months (the original) and technically it is also not an extension of the original contract as we have come off that contract now, it has actually ended completely and in effect we are on a new contract now. I did discover someone saying about a similar situation "I would also argue that the clause is ambiguous and contract law usually holds that ambiguous clauses are read in the favour of the party who did not write it." ?

And I found "A fixed term tenancy (which is what ours was) does not continue, it ends and is replaced by a SPT which is another tenancy." which is saying what I was saying about being on an entirely new contract now - not a renewal or an extension of the old one.

JACUSTOMER-lbplocve- :

Thank you very very much for your help. They sent me an e-mail yesterday threatening legal action, which I am not too worried about, but it is fairly urgent I get back to them promptly to stop anything happening.

Alex Watts : There is something you can do for the avoidance of doubt.
Alex Watts : You could formally end the tenancy, they could move out for 1 night then you could sign them up on a new tenancy.
Alex Watts : They are new tenants, they have not renewed as they have moved out.
Alex Watts : This is a way around their fees.
Alex Watts : As for periodic the chances are you are liable for the fees.
Alex Watts : This is because it is not a renewal but a continuation of the tenancy. In effect it becomes a monthly rolling contract.
Alex Watts : Therefore sadly my view is that you would be liable.
Alex Watts : But in terms of the way forward, if the tenants are amenable, end the tenancy and have them move out for 1 day.
Alex Watts : Can I clarify anything for you about this today please?
JACUSTOMER-lbplocve- :

Thank you very much,

JACUSTOMER-lbplocve- :

for your help.

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