UK Landlord Forum / Life

New to the forum - hoping someone can help! My son has a three-year contract and has asked to leave 17mths early. His tenancy agreement states he'll have to pay rent until a new tenant is found, and also to pay the agent's 13.2% commission for the remaining 17mths. Not unreasonable... BUT his landlord tried increasing his rent a few months ago (my son quite rightly didn't agree - there was no increase clause in the contract), so we suspect the landlord will be charging a higher rent to the next tenant.

The Tenant Fees Act states that the fees charged as a result of an early surrender must not exceed the loss suffered by the landlord as a result of the early surrender. IF (and we won't know until it's advertised) the landlord increases the rent for the next tenants, even with paying agency commission for those tenants AND for my son's tenancy, he will probably not be making a loss, so is he allowed to charge the commission?

Another question:  My son has had no heating since he moved in (July 23), despite contacting the landlord on several occasions - a contractor was sent out on one occasion, to look at several issues including the storage heaters, but failed to solve the problem. It's not been unbearably cold, as it's a flat in a fairly modern block, and, as a fairly shy and not particularly confident 22yrs old, he hasn't wanted to pester too much as until recently was on good terms with the LL (who manages it). Would he have a case for claiming back any rent on this, or would it be hard to fight?

He told my son he "has no sympathy" for him when he reported a new leak a day after a plumber had been to fix a different problem, and has stated that "there can be no intention of spending more money than is obtained in rent". I am a landlady myself, and it's LLs like this, that make me ashamed to tell anyone!!!

The landlord doesn't have to agree to your son living early (full stop). So that's a problem.

Unless they can show that they will have to pay the commission to the agent, even if they rent the property again, the landlord can't charge it to the tenant for ending the tenancy early, that's not a lawful charge (and so the landlord should probably not agree to end the tenancy early).

Your son should have heat. If the landlord is being unreasonable, the normal advice is to involve the council.

But your son is entirely reliant on the landlord doing something they possibly shouldn't.

Thanks - I know that my son's lucky the landlord hasn't just said no, fullstop. Also realise that the bit about paying the commission is written into the contract. Probably just have to pay up and be thankful he can go.

I agree; there's what's right and what works.

He can always pay and then challenge it once he's formally released from the tenancy. The landlord would have to show that it was not a prohibited payment under the TFA and refund it if he couldn't. If he refused your Son could involve local Trading Standards to force the issue.

That's what I wondered - would make more sense to question it once he's safely out of the property.

Since my original post, I've heard the landlord intends to re-let the property using a different agent. We realise the landlord could stand to profit, rather than lose, from my son ending his tenancy early, if the rent from the new tenancy is higher (which it almost certainly will be) and if the commission charged by the new agent is lower (again, we assume that's why he's changed agent so highly likely), whilst charging my son to pay the commission . In which case, am I right in thinking it would be seen as a prohibited payment?

If there is some loss, but not equal to the amount of the 17 months of commission until the end of his tenancy, presumably my son would only be obliged to pay that amount, rather than the 17 months of commission?

17 months of commission is a small amount for my son to pay compared to what the landlord could ask for - ie. for him to continue paying rent until the end of the tenancy; but he resents paying it given that the landlord has been very relunctant or slow to solve the issues which have arisen since the start of the tenancy, and it is the landlord's attitude more than anything which has made him wish to leave - he dreads having to report any problems.

The issue of the non-functioning storage heaters: the landlord has been informed on several occasions, and knows the handyman he sent failed to sort the problem, but nothing more has been done. My son hasn't pestered, so I think it would be hard to seek compensation on this issue, plus the property isn't ever so cold. But it's another reason for ending the tenancy. Most landlords, myself included, realise that any form of problem with heating needs to be sorted ASAP!

Wish he'd had the opportunity back then to choose a fully managed rental property, with a shorter term than 3 years, or at least with a break clause!

The landlord can't charge more than their loss. But the arrangement with the next agent and next tenancy doesn't affect their loss for this tenancy - that's just a future profit.

I can understand the resentment of paying anything when the services hasn't been right. But, from here, being let off a three year contract for a discount against the full rent amount is a win. And, as @DPT says, your son can always try and address the issue down the line.

Thanks for clarifying that first matter - I wasn't sure whether the future tenancy/agency and possible profit were relevant.

You are completely right though - we are relieved he's agreed to let my son go, and to find a new tenant! I think it helps that the landlord wants more rent but can't ask my son due to the accidental omission of the review clause!!

I am really surprised that your son entered a contract without a break clause, Tenants should always make sure that there is such a clause.

In these situations it always helps to have some leverage so that a reasonable settlement can be made between the parties.  The general idea is to make it too much work for the Landlord to pursue and so all parties decide not to take legal action.  To achieve this your son MUST deal with the Landlord not the Agent, Agents are generally blood sucking leeches that add very little value to Landlord or Tenant.  They serve a purpose to novice Landlords or Landlords who are so busy and have such a high rate of pay that they don't care.

The Landlord's residential address should be in the AST, you son is entitled to know it, he can also pay £3 for a Land Registry Title Deed.

STEP1 – HEATING

Have your son call the local Council and explain that he has been without heat since July 2023 and would like them to issue an improvement order.

If the Landlord fails to repair the heating then your son may apply for a Rent Repayment Order for failure to comply with improvement notice, the notice will have a date works must be completed by.

Your son does not have to pester, he has only to have reported it once in the first place and once after.  The Court recognises things like a Tenant in fear of revenge eviction so saying nothing further.

Even without an RRO your son has suffered a loss to his enjoyment of the property, nobody should have to put up with no heating, so he can try to put a value on it, I would start at 33% of the rent and expect it to be negotiated down a bit, plus any additional costs and inconvenience for his own heating.  For example he would never come home to a warm house/flat.

If he can show that he has incurred additional energy costs then he can make a claim for those, consider that Storage heaters run on Economy 7 rates, so if he used some other sort of heater he would have paid the higher charge, obviously he needs to be on an Economy 7 plan and he will need the rates from the Energy Company for the period claimed.

He then needs to have evidence of the number of units used and work out what percentage heating used,  this is quite easy by getting a cheap energy monitor from ebay for between £7 and £10 and plugging it between the heater and the mains.  So he might find he used 3 to 5 kWh a day without any heating and 35kWh with the heater, that gives 30 which he multiplies by his Normal Electricity rate.

On an economy 7 plan the difference between the unit rates might be as below but areas vary, so check his energy bill:

31.16p per kWh (Day)
13.40p per kWh (Night)

As you can see it is nearly 3x as much to use day rate which he would be using in the evening.

Then he needs to work out how many kWh the storage heaters would have used.  They are usually on for 7 hours, so a 2Kw heater for 7 hours might use 14 but check the meter for actual usage because it will go off or reduce once the bricks are hot through.

If these heaters were working at any point in his Tenancy then his energy use before and after July will back up his claim.  By working out the difference using these different methods he can come up with a fair number.

STEP 2 FULL COMPLIANCE OF DEPOSIT PROTECTION LEGISLATION

NEXT have your son check the paperwork for his deposit; was it protected in one of the three Government backed schemes within 30 days of being taken and was he served with a proper copy of the Prescribed Information relating to that deposit protection also within 30 days.

If he has not had anything about the deposit have him check the three sites to determine if or where his deposit has been protected, using the links below.  NOTE: If he has NOT received the prescribed information but does find it protected at one of the sites below, he should still write to the Landlord or Agent asking for details of whether his deposit has been protected as he cannot trace any notification of that (if true).  He should send a BCC of that message to you.   

http://bit.ly/depchk1

http://bit.ly/depchk2

http://bit.ly/depchk3

The Tenancy Agreement might have some vague information about the deposit, but that may or may not be adequate as PI, often they use templates and forget to update this; the information required is shown on this Gov Website.

https://www.legislation.gov.uk/uksi/2007/797/article/2/made


STEP 3 CHALLENGING FEES

The Landlord can only charge for the actual loss he suffers, there is no loss of commission/rent, a new Tenant should take no more than 7 days to find and reference.  A good way to prove this is to advertise the property himself at market value (at least 20% above what he is paying), find tenants of a similar calibre who are prepared to move in within a week of him leaving and ask them for references, then provide the details of these applicants to the Agent and Landlord. 

The Landlord has an obligation to mitigate any loss your son suffers if he wants your son to pay such a loss.  Some Agents charge a percentage of the first month's rent to find a Tenant; this does not bear any relation to the actual cost/loss so would not be valid. By providing them with the Tenants you will have proven their costs are excessive and bear no relation to actual costs.

In any event your son does not have a contract with the Agent and such a clause would be an unfair contract term because it goes against common law, namely a prohibited payment under the Tenant Fees Act (2019).  The simple fact is that the Landlord will likely pay the Agent the same commission.  If the rent is increased then the Landlord will not be out of pocket.  As for finding a Tenant the Landlord may be paying this sooner than the 17 months remaining but he will likely offer a 3 year tenancy again so not have to pay such fees in 17 months' time. Therefore no real loss

Always challenge percentages, they can never relate to an actual loss suffered, in an Agency fee they will be for management not addition recruitment of a tenant, I have fought such spurious claims many times.  As I said if rent increased there is no loss there is gain.

You start by visiting the website of the Agent, check out their rates and what they provide for their service charge.  Look for alternative charge for just finding a Tenant because that is the only difference here, then make sure it is fair and relates to actual costs.  I would argue that in these days of OpenRent and other platforms there is no real cost to finding a new Tenant, but perhaps a small amount on Tenant Referencing (if it was done for your son he will remember).

Your son should write a formal notice to quit to the Landlord and Agent saying he has to leave as he can't face another winter of a cold flat/house and despite numerous requests to have the heating fixed, it has not, so he has been forced to end his lease prematurely.  He can say that this is not only a breach of Section 11 of the Landlords & Tenants Act 1985 but also a breach of contract under Section 3.1.4 of said contract (use whatever is in his AST)

If you look in the lease there will be sections of Landlord's Responsibilities, one of those terms will refer to keeping heating, this is an example of what you are looking for

11 to 16 of the Landlord and Tenant Act 1985 (as amended by the Housing Act 1988).  These sections impose on the Landlord obligations to repair and keep in good order:
3.1.1.    the structure of the Property and exterior (including drains, gutters and pipes);
3.1.2.    certain installations for the supply of water, electricity and gas;
3.1.3.    sanitary appliances including basins, sinks, baths and sanitary conveniences;
3.1.4.    space heating and water heating; but not other fixtures, fittings, and appliances for making use of the supply of water and electricity.  This obligation arises only after notice has been given to the Landlord by the Tenant as set out in clause 4.2 of Schedule 1 of this Agreement. 
3.2.   To repay to the Tenant any reasonable costs incurred by the Tenant to remedy the failure of the Landlord to comply with his statutory obligations as stated in clause 3.1 of Schedule 2 above.


[Source:Painsmiths)

So now your son has enough leverage to make the Landlord let him break his contract for free and provide a good reference.

Sure on paper the Tenant is liable for the performance of the contract but practice direction and the overall objective say that they should try to work things out without going to Court.

Having the Council come in as a matter of urgency will give your son additional evidence, he also has his communications with the Agent which may include emails and WhatApp message (which he should export).

Usually the Council will issue a notice to get the heating fixed in anything from 48 hours to 7 days, likely shorter as we have sub zero temperatures at the moment.

If there is a deposit protection failure then the sanctions can be factored in, the failure to address the heating is not specifically a factor but when Judge sees that a Landlord has bad behaviour they often apply the biggest sanctions of 3x the deposit.  He has 6 years to make a claim although this can be stretched in some circumstances.

Read this to understand why it makes no sense to punish Tenants when they leave early

https://www.propertyinvestmentproject.co.uk/blog/your-tenant-wants-leave-early/

Quote from: LandladyDK on November 21, 2024, 08:39:49 PMThanks for clarifying that first matter - I wasn't sure whether the future tenancy/agency and possible profit were relevant.

You are completely right though - we are relieved he's agreed to let my son go, and to find a new tenant! I think it helps that the landlord wants more rent but can't ask my son due to the accidental omission of the review clause!!

David - thank you so much for all this, I've only just seen and am reading and digesting. Some very interesting and useful points, and really helpful plan of action.

A few things - but first, yes, of course you're right about the break clause. My son was new to the rental market, so didn't realise, but it was more a case of desperately needing a 'fixed address' as a condition for starting a new job within a couple of weeks, 50miles from his family home, and with properties being snapped up before he'd even viewed them - he was left with little choice but to accept 3yrs with no break clause - he didn't even wait for a viewing! Learning curve!

At the moment, what's been holding him back from mentioning the heating has been the worry that the landlord will actually fix the heating then, as punishment, exercise his right to insist my son stays in the property for the next 17 months, rather than looking for a new tenant. Of course, as you say, it makers no sense to make a tenant stay, but this guy doesn't always seem to realise implications of his actions! Landlord seems, at the moment, to have instructed a different agent (as he was upset with the current one for not having remembered to add the rent review clause in the agreement!), so we're hopeful it won't be long. My son has another property lined up for the end of January, so doesn't want to rock the boat. So, wondering how viable it is to 'negotiate' once he's out, and before he starts paying up for that 13.2% of 17mths agency commission? Obviously it would be better to involve the council now etc etc, but I can understand his worry.

Current agent is Foxtons, who seem to charge 13.2% of each month's rent just for marketing, referencing, compliance, managing finances... seems a lot to me, when I use an agent for my own rental property which charges 12% for full management, and, as you point out, it could undoubtably be done for a lot less. Presumably, if the new agent manages to find tenants, the landlord will be paying their agency fee (out of the new tenant's rent), AND the remaining 17mths of the Foxtons fee. I notice in the Foxtons small print that they say they will try to recover it from the leaving tenant, but cannot guarantee - because of course it is between them and the landlord, and writing it into the tenant's contract is just to cover the landlord.

I will get him to monitor energy, as you suggest, and check on the deposit.

Thanks again - so helpful.