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LouthLass

Sacked Uk Agent - Now They Witholding Tenant Deposit!

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Can anyone help point me in the right direction as I am at my wits end. Today I finally sacked the agent I was using as their service was absolutely ridiculous. However, they have now sent me an email stating they want the commission for the remainder of the agreement and until they receive this then they will not release the tenant's deposit. They claim to be registered with TDS.

However, do they have a right to withold my tenants deposit? The dispute is between myself and the agent - not the tenant! As far as I am concerned she is fully entitled to recover this amount and pass it on to the new agent I hired.

Any advice on this would be much appreciated.

Kind regards

LL

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yep,it is the tenants deposit.very naughty.tell them that if they want money off you then they either have to get you to accept liability or let a court decide it.

I'm not a lawyer mind.

Many thanks, from speaking to the tenant in the last hour, I also confirmed they do not have a copy of the tenancy agreement, the tenant sent it direct to me based on their failure to get it organised! Does this make a difference??

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Can anyone help point me in the right direction as I am at my wits end. Today I finally sacked the agent I was using as their service was absolutely ridiculous. However, they have now sent me an email stating they want the commission for the remainder of the agreement and until they receive this then they will not release the tenant's deposit. They claim to be registered with TDS.

However, do they have a right to withold my tenants deposit? The dispute is between myself and the agent - not the tenant! As far as I am concerned she is fully entitled to recover this amount and pass it on to the new agent I hired.

Any advice on this would be much appreciated.

Kind regards

LL

It's good news for you that they've put this in writing because they absolutely cannot withold the tenants deposit on this basis. It helps to prove that they are indeed incompetent. Oh how I would love to reply to THAT email. :lol:

Whilst they are entitled to their mamagement fees for the current tenancy agreement term just check whether there is a termination clause with notice in your own agreement with your LA. It is dubious for them to assume that they can charge you indefinitely once you have terminated the contract with them. If you have to give them a couple of months notice then it might be easier than getting into a legal wrangle.

Please keep us informed as to the outcome. Good luck!

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Remember at the end of the day you are responsible for the deposit. If the letting agent doesn't give it back when the tenant leaves, you will have to give it back and pursue the letting agent for the money. You have the contract with the tenant. Make sure that the deposit is still secured during your tiff with the letting agent or else the tenant will be able to take action against you.

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It's good news for you that they've put this in writing because they absolutely cannot withold the tenants deposit on this basis. It helps to prove that they are indeed incompetent. Oh how I would love to reply to THAT email. :lol:

Whilst they are entitled to their mamagement fees for the current tenancy agreement term just check whether there is a termination clause with notice in your own agreement with your LA. It is dubious for them to assume that they can charge you indefinitely once you have terminated the contract with them. If you have to give them a couple of months notice then it might be easier than getting into a legal wrangle.

Please keep us informed as to the outcome. Good luck!

Interestingly this is what the whole OFT vs. Foxtons case is about so I would urge some caution in assuming that terminating the contract with the LA terminates your requirment to pay commission. Historically letting agents have consistently won cases in court where commission is payable on resigned contract when the tenant remains in the property even if you fired the LA or negocaited the contract yourself (btw letting the contract go periodic is best cure for this)

We are waiting for final judgement on the high court case in the next month or so it won't take long to find out where this is going. I have an ongoing issue with a letting agent in London but insisted the claim went on hold until the outcome of the OFT/Foxtons case was heard. They took legal advice and had to agree.

The whole point of the OFT case is that these clauses are unfair and anti competitive as you cannot fire an LA for poor performance. The only way to "terminate" the contract is to evict the tenants which helps nobody.

Edited by Matt Henson

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Interestingly this is what the whole OFT vs. Foxtons case is about so I would urge some caution in assuming that terminating the contract with the LA terminates your requirment to pay commission. Historically letting agents have consistently won cases in court where commission is payable on resigned contract when the tenant remains in the property even if you fired the LA or negocaited the contract yourself (btw letting the contract go periodic is best cure for this)

We are waiting for final judgement on the high court case in the next month or so it won't take long to find out where this is going. I have an ongoing issue with a letting agent in London but insisted the claim went on hold until the outcome of the OFT/Foxtons case was heard. They took legal advice and had to agree.

The whole point of the OFT case is that these clauses are unfair and anti competitive as you cannot fire an LA for poor performance. The only way to "terminate" the contract is to evict the tenants which helps nobody.

It is yes - but Foxtons are charging high tenancy renewal fees to landlords when a tenant renews their tenancy agreement without any involvement from at all Foxtons. So ignoring the management fees for now you can't charge a fee for a service you don't provide - especially a high one! So letting it go periodic wouldn't have worked with Foxtons.

The court case must be soon. I think it will rule against Foxtons although I've not seen their contract.

Our contract is clear on termination options so hopefully the OP's will be too.

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It is yes - but Foxtons are charging high tenancy renewal fees to landlords when a tenant renews their tenancy agreement without any involvement from at all Foxtons. So ignoring the management fees for now you can't charge a fee for a service you don't provide - especially a high one! So letting it go periodic wouldn't have worked with Foxtons.

The court case must be soon. I think it will rule against Foxtons although I've not seen their contract.

Our contract is clear on termination options so hopefully the OP's will be too.

I think it is a London thing, almost all LA's in London adopt the Foxtons policy but yes they do contract to pay a renewal fee regardless of who renewed it and whether you contract other services from them, hence why a periodic tenancy does work as there is no renewal to charge a fee against (they don't charge a month fee only a single fee on renewal)

Agreed management fees are something different and most LA's will let you terminate (with notice) if you are not happy.

The case is supposed to be next week according to Legal Begal but their view is don't get too excited as like the bank fees thing, it will roll on and on with appeal and counter appeal, the letting industry (in London at least) has too much to lose without going down fight.

I still think they will lose however!

Edited by Matt Henson

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a periodic tenancy does work as there is no renewal to charge a fee against (they don't charge a month fee only a single fee on renewal)

If that's the case how do they know if the LL has renewed the contract? Why don't all the LL's go on to periodic if it saves them a big fee? Or did they just not know about this clause until it was too late? :(

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If that's the case how do they know if the LL has renewed the contract? Why don't all the LL's go on to periodic if it saves them a big fee? Or did they just not know about this clause until it was too late? :(

The later I am afraid, that is how we found out about it, it is tucked in the small print and in a really contrived way, one of the OFT arguments is that is does not pass Lord Dennings "red hand rule" but until now the lower courts have argued it is a business to business agreement and not covered by consumer laws however with the "outbreak" of BTL it could be argued that letting property is now in the consumer domain.

Also the cheeky LA's phone the tenants with allsorts of tricks to find out, there is 9-12% of the annual rent in it so it is worth a bit of subtitude especially in London with rents at £20k+ a year

Edited by Matt Henson

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Hi all,

Think I have had some positive news today from my tenant, she phoned the old letting agent and they told her to call in sometime next week to collect a cheque for her deposit!! This is such a relief I must say. In the meantime they have emailed me an invoice for the commission due on the tenancy agreement which they claim ends in Nov 09 - they have no signed copy of this tenancy agreement - this was the straw that broke the camels back in my dealing with them, the old TA ended beginning of May and despite my numerous calls and emails they never got the tenant to sign a new one, they do not have a tenancy agreement that ends Nov 09 in their possession!! I advised them that I was in touch with TDS who told me that they did not have a legal basis to withold the deposit from my tenant - again the dispute was between myself and them, not the tenant so therefore she should not suffer because of our 'disagreement'. I am adamant that I do not owe them anything because I believe they broke the contract before I did therefor making it null and void and also they never succeeded in obtaining a new tenancy agreement!!

We live and learn, what do other posters think??

Kind regards

LL

Edited by LouthLass

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The later I am afraid, that is how we found out about it, it is tucked in the small print and in a really contrived way, one of the OFT arguments is that is does not pass Lord Dennings "red hand rule" but until now the lower courts have argued it is a business to business agreement and not covered by consumer laws however with the "outbreak" of BTL it could be argued that letting property is now in the consumer domain.

Explain, please? Is this the same as the rule in Equity that the plaintiff has to come to court "with clean hands"?

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Hi all,

.... In the meantime they have emailed me an invoice for the commission due on the tenancy agreement which they claim ends in Nov 09 - they have no signed copy of this tenancy agreement - this was the straw that broke the camels back in my dealing with them, the old TA ended beginning of May and despite my numerous calls and emails they never got the tenant to sign a new one, they do not have a tenancy agreement that ends Nov 09 in their possession!! ... the dispute was between myself and them, not the tenant so therefore she should not suffer because of our 'disagreement'. I am adamant that I do not owe them anything because I believe they broke the contract before I did therefor making it null and void and also they never succeeded in obtaining a new tenancy agreement!!

We live and learn, what do other posters think??

Kind regards

LL

I have found myself in a very similar situation. I sacked my agent due to breach of contract. Now she is insisting I have to pay her a monthly commission as long as the tenant stays in the house. Such a clause is indeed in the agreement I had with the agent.

If you sack the agent due to breach of contract, can they use the same contract to insist you have to pay the commission? Doesn't make any sense to me. And why should the tenant suffer because of this?

I'd like to know what you find out.

A_B

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I've just googled the case and this report has come up on the decision from The Court of Appeal allowing OFT's appeal and dismissing Foxtons cross appeal.

I need to digest it fully but on the face of it the term is unfair and can be disregarded in existing contracts.

The WLR Daily

Regarding payment of commission where the agent is in breach of contract you just need to go back to general principles of law. The agent is entitled to payment for the work he has done. Simple really, but then the complexity of the statement comes into play. What did he agree to do, how much of it has he done, how much should he be paid for what he has done?

Edited by sleepwello'nights

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Explain, please? Is this the same as the rule in Equity that the plaintiff has to come to court "with clean hands"?

Nope not that clever, it simply implies that important facts in contract should have a "big red hand" pointing at them to make sure they are read and not slipped in to the small print. i.e. key features of the contract (like how much you have to pay) are specifically brought to the attention of person taking out the contract.

There a few famous test case in 50's that brought it about and all trivial, one of a lost coat in a hotel and another some minor detail on the back of train ticket.

Edited by Matt Henson

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I've just googled the case and this report has come up on the decision from The Court of Appeal allowing OFT's appeal and dismissing Foxtons cross appeal.

I need to digest it fully but on the face of it the term is unfair and can be disregarded in existing contracts.

The WLR Daily

Regarding payment of commission where the agent is in breach of contract you just need to go back to general principles of law. The agent is entitled to payment for the work he has done. Simple really, but then the complexity of the statement comes into play. What did he agree to do, how much of it has he done, how much should he be paid for what he has done?

The other interesting argument is the presentation of the terms. In these contracts the term for continued payment of commissions on renewal is tucked away on the last page along with the stuff about health and safety, gas regs etc. One of the key arguments is this a core financial term and contarct needs to state clearly the commitment the person signing the contract is making.

It this fact that brought the whole issue of lettings contracts to the attention of the OFT. We certainly complained to consumer direct, we were presurised to sign a contract there and then by a letting agent and were specifically told there would be no further fees other than the initial signing fee. The agents didn't even charge us for the first 18 months (2 renewals) and then out of the blue we got a bill. Fortunately the OFT v. Foxtons cases had just been announced and we asked for their claim to go on hold until the case was heard, they agreed.

Edited by Matt Henson

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