UK Landlord Forum / Life

Hi all. This is a really great resource you've got here. I just came across on a google search. I'm fairly new to the property letting business but I'll contribute in whatever way I can going forward.

I let my flat out with one of the big agents. They have renewal fees, which I would rather not pay. The official tenant on the rental agreement is a company. If the name of the company was to change slightly do you think this would qualify as a change of tenant from a legal perspective? I was thinking then I could just say to the estate agent that the legal tenant has changed and they were signing directly with me and therefore the fee for renewal wouldn't apply.

What think?

Many thanks.

If the Letting Agent were complete idiots... maybe. Many of them are. Still a bit underhand, though... you signed-up to their terms and conditions willingly one assumed? I mean, they didn't hold a gun to your head and force you to sign-up to using their 'services'? I'm no fan of Agents but my way of avoiding their fees is not to use them for anything other than Tenant Find and contact after that is broken until I need them to get a property on Zoopla or Rightmove next time. It's simple and it works (so far).

Thanks for the reply.

2 points there.

First one would be regardless of them being idiots are not, if the legal name of the tenant is different to what was on the previous documentation then technically it is not a renewal and they cannot charge a fee.

Second one would be one of ethics. I must admit to ignorance of the issue at the time. Which you could totally say is my fault and that's what I signed up for. If they had actually done anything and earned money then I'd be happy to pay for it. I'm not stingy in that respect. I've managed the property myself and the tenant wants to stay on. I'm not comfortable with paying them 100% of the finders fee again for doing nothing. They found someone the first time and used their network etc. This time it's hardly the same. As such from an ethical standpoint I'm ok with it. Completely understand if someone else things something different but we all make our own choices and draw our own lines and I'm happy with this. Next time round and now being aware of this I wouldn't get myself into that position again and would avoid agents with renewal fees that are not significantly smaller than their initial fees.

So I'm more looking for guidance on the first point re the tenant changing. I don't see how legally they can do anything about that?

My plan is to offer to pay a significantly reduced renewal fee, and if they don't go for that then the name will be changed.

Quote from: larky on October 02, 2014, 10:48:48 AMWhich you could totally say is my fault and that's what I signed up for.

Well, yes... all the other stuff is just you trying to justify it, really. I actually have no problem with that... I just think people sign up to things too easily these days and then do things they might not normally do when they realise they shouldn't have. Is there no termination clause that you can take advantage of, even if there is another means of payment, whereby you can - once and for all - dispense with their 'services' for good in an above-board manner?

I would like to see how your technicality would pan out... if it was a person, as Tenant, who changed their name then it would still be the same person, right? If you could ease your way out of various responsibilities just by changing your name then I think that would be very popular.

Whatever happens, your approach isn't one that is moral... it is intentionally trying to deceive and that would not sit happy with me. If I did not want to deal with the Letting Agent any more I would terminate the agreement... maybe I'd fight over the amount any termination fee might be - if I thought it was unreasonable (they usually are) because I would not be happy (as you say) paying someone for nothing. I think I'd prefer to do that - and push back aggressively on any daft termination fee - rather than go changing names etc.. Anyway, let us know how it goes.

Yup, like you say it's me justifying it. I'm justifying it because you brought it up as an issue. I didn't take you up on your language use but I will as you brought it a second time. 'Underhand' or 'deceiving' either imply or directly mean not telling the truth. I'm being very open and clear to the agent about what's happening. There's no deceit (give me a reduced fee which I'll pay, if you don't then the tenant signing directly with me under a different legal name and no fee). Also it's not moral in your viewpoint only, you don't have arbitration rights there. I respect your viewpoint, but that's what it is, a viewpoint. It's not fact or written in stone. 'People sign up too things too easily' - guilty in this case, I should have known better. However personally I think that slipping in an 11% renewal fee to your average-unfamiliar-with-rental-market Joe like me who's just happy he's got his first ever property tenant is more morally questionable. (Notice I used 'I think' rather than stating fact ; ) ).

Actually a lot of people have changed their name for a new start of some kind : ). Corporations act under different names all the time. It's actually very popular.

I'll check into the termination clause.

I do appreciate both your candour and your advice. It's good when people say what they think. Thks v much and I'll let you know for sure.

This is all fine, I'm only acting as a foil for you... but I'd like to know how the 11% renewal fee was "slipped-in" to what you had signed.

Was it not there when you signed it and it - somehow - appeared later? Did they use magic ink? I'm a tad facetious here - but we both probably know the terms and conditions were there for you to read... as you say, rather honestly, you were probably all excited about becoming a Landlord for the first time and actually finding someone who wants to live in your property. Yes, we've all been there - it's only later when you realise that only the crappest properties don't let pretty easily.

Please accept I ain't (never) saying Letting Agents are paragons of morality... I'm just seeing more and more Landlords crying "foul" when all this information was there for them to read in the first place - they just didn't bother - usually. If it wasn't there for you to read... then I'd be 100% behind you in not paying a penny. I'd come along with you and enjoy sitting down in their office and would back you up when you said to them that they're not getting a penny more.

A change of name for a new start is... interesting... but if you have a loan with a balance outstanding, the change of name doesn't absolve you from paying that loan back. So... a new start = yes, a shrugging-off of your financial responsibilities - as a person = no.

As I say... look into termination first, but if you decide to go with the change of name, please let us know the results. I'd expect termination won't be that appealing... but there is the added angle of "unfair penalty" if that's the case. If one party is not happy with how the other party has conducted themselves, then there should always be an ability to terminate, without incurring a stupid penalty... Letting Agents are fond of these because if you stay you pay them for doing nothing and if you go you pay them for doing even more nothing.

So - you've told the Agent already that you're planning on changing the name of the Tenant and therefore you reckon you won't have to pay them a renewal fee due to that? How did that go down? Are you awaiting a response?

Hi Larky,

Apologies I haven't read what's been said.

But you don't need to start a new tenancy in my opinion, because you're not talking about changing tenants/companies. I think you can get away with a new supplement document which mentions the name change/update.

@Hippogriff - Haven't spoken to the agent yet. In the next few days. I'll be back with an update. thk you again.

Btw...I did speak to my solicitor briefly. His opinion was that a renewal fee of 11% with virtually no work attached and which is the same as the initial finders fee which has a lot of work attached amounts to a penalty. For it not to be a penalty they would have to able to justify it and he didn't see how they could do this. And it doesn't matter if it's part of a contract or not, a penalty is unenforceable by law.

@propertyfag - thks for the reply. I think it may be that you think a tenant name change has me thinking I need to rewrite the contract and would therefore have to pay renewal fees on the new contract? What's happened is that the contract is up for renewal with renewal fees to pay,  and I was wondering if changing the name of the tenant on the contract might help me avoid paying the renewal fees. Apologies if I've misunderstood your post. Thk you

What I don't understand is this.

End of the tenancy, you tell the Agent they are no longer needed and you  will be marketing the property and managing it without there most generous and professional assistance.

End of story.

Tenant pays you the rent from then on?

If you want belt and braces, get them to sign a new AST with a different legal name, lodge deposit etc, jobs a good 'un.

I see no issue with your solution, I I did chuckle at the use of the word "foil" by Hippo, it had all sorts of Musketeer connotations in my mind which is nice.

I agree that termination is the way to proceed... if there's no termination fee and it's a natural end then that's great, but if there's some kind of termination fee then that's what you can start to look at as a penalty in a rather easy way. You seem to be au fait with the penalty concept, so I'll not go further into that for you. I don't see the value in a renewal at a vastly reduced rate - it's still money going out when it's not needed, and for no work... and I remain nervous (dubious is probably a better word) about the change of name idea.

http://www.dailymail.co.uk/news/article-2776842/Shocking-photos-capture-real-squalor-Britain-s-slums-poverty-meant-afford-Playstation.html?ito=social-facebook

Some of the Landlords first BTL.

Happy friday people!

Termination - the estate agents are entitled to their 11% so long as that tenant is still there. The only way to terminate is to get a new tenant in. Period.

I'm not really up on the penalty thing Hippogriff - be great to hear your thoughts on that please?

Quote from: larky on October 03, 2014, 11:21:33 AMTermination - the estate agents are entitled to their 11% so long as that tenant is still there.

Well, one hopes not... that would appear to be a kind of perpetual agreement, which can't stand up to scrutiny. If you've terminated your agreement with the Letting Agency and you two parties no longer have any involvement, then that continued / perpetual 11% can only be seen as a penalty... I believe the stance is really as simple as - penalties are considered unfair.

I would be considering the following... not saying act on it yet... but I'd be considering formally writing to the Letting Agent telling them that you are breaking the agreement from X date and then ensuring you have nothing further to do with them. Ensure everything else is lined-up - I'm assuming they're not doing anything more for you - they're not collecting rent, they've not protected the deposit under their name etc. - and then just wait to see if they take things further. If they do, then your position, in Court, is one of defence rather than attack. Then you'd be looking at the OFT and UTCCR stuff... hoping that it is seen as an unfair term and condition and, therefore, you're not liable.

Try also...

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284426/oft311.pdf

"A term is likely to be considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers."

My issue with the OFT stuff (like OFT356, for example) is that is it more like best practice or guidance... it isn't law, only a Court can decide.

Yes that's what the termination clause is. It requires a change of tenant, otherwise they get 11% of rent.

The rent is being paid to the estate agent and they pay to me. Deposit is not protected under their name, my name & TDS thru the agreement signed with them.

I've had a conversation with them. So I'll let you know.

That's a good point re a position of defence rather than attack.

Again many many thks for your input and advice.

1st you need to check the terms and conditions of your agreement with the agent and what it says about whether you continue to pay for "introducing" a tenant even if you terminate the management of the property by the agent.

Next, you are in a good position because you let to a company, this means that they are not as protected as a tenant would be.

So you approach the company, explain you have fallen out with the agent and because of the agency terms (if they specify you pay) you need to end the tenancy with the company.  Of course if they wish to buy a company off the shelf for £5 and get £50 cashback from Barclays then you would be happy to let to the new company.

Nothing underhand, it is just business.

The company is a legal entity, it does not matter which person lives there, the agreement is about the legal entity of a company let, the former company.

Many agents have lousy terms and conditions that do not protect them in such circumstances, so check carefully what you signed.

If their terms do not make provision for charging you for any tenant they introduce, then look for a minimum period, look for a notice to end the agreement etc.  You only need to change the tenant if the agreement makes you pay.

Hi. Sorry it took me a while in getting back. Here's how it worked out...

I called the agent and said that I thought the fees were too high (given they were the same as finding a tenant in the first place and this time just changing dates on the contract, etc etc) and that I had been dealing with the corporate tenant and the occupant and that if they didn't accept a lower fee of 3% that the corporate would change the name of the tenant on the contract and that the renewal fee would be inapplicable. The person dealing with renewals had to run it by the letting agent in the local branch. I spoke to her and she proposed 5%, we settled in the middle at 4%. I then said we should just consider it a termination fee. However I thought later that if I kept the agent on then I would not have to go through an inventory check again, I would not have to rewrite the contract or change bank details etc, I would still be in the tenancy deposit protection scheme etc - none of these a huge deal but I changed my mind and kept the agent as I was paying them 4% anyway and they were happy to agree a zero fee next time for renewal and also zero termination fee at any point.

Zero termination fee is a nice guarantee to have.