Helpineedsomebody Posted March 7, 2014 Report Share Posted March 7, 2014 Almost two years ago my wife and I became accidental landlords to buy our dream house, It's now time to sell the rented property to fund the work on our current house. We have rented using a letting agent and have had the same tenants from the start, last time I spoke to the tenant they did show some interest in buying. I have checked my Agency agreement and under sale of property it states: By agreeing to these terms of business you confirming that, in the future, if we introduce a buyer and/ or negotiate with a buyer for the sale of your property, you will pay us a selling fee based on 1.75%(+vat) of the total selling price ( or other consideration) payable for your property such selling fee being payable at the event of exchange of contracts ( to be paid at completion or on demand if completion is delayed for 6 months or more). I am a little confused over this statement as I've only used this letting agent only for letting, and now I want sell they also want more money. I have done some research and on 'The Property Ombudsman Code of practice for residential letting agents' Section 3j Under Fair Contracts it say's : Not require payment of a commission in circumstances where the tenant agrees to purchase the property unless this is subject to a separate sales agreement. Link to comment Share on other sites More sharing options...
Richlist Posted March 7, 2014 Report Share Posted March 7, 2014 Yes I believe you do.....its the normal way it works. Your agent introduced your tenant(s) to you and if they subsequently proceed to buy your property then the agent is entitled to a sales fee. Link to comment Share on other sites More sharing options...
Grampa Posted March 7, 2014 Report Share Posted March 7, 2014 But are they going to do any further work for the fee such as dealing with the solicitor enquires, drawing a memo of sale, and all the chasing up that a estate agent would do? I am sure I have read somewhere that these clauses are not enforable by letting agents and maybe an unfair term. It maybe a Foxtons case but not sure. If your letting agent is going to act in the estate agent role they legally have to be a member of one of the Ombudsman schemes and data protection register. ICO Link to comment Share on other sites More sharing options...
Helpineedsomebody Posted March 7, 2014 Author Report Share Posted March 7, 2014 But are they going to do any further work for the fee such as dealing with the solicitor enquires, drawing a memo of sale, and all the chasing up that a estate agent would do? I am sure I have read somewhere that these clauses are not enforable by letting agents and maybe an unfair term. It maybe a Foxtons case but not sure. If your letting agent is going to act in the estate agent role they legally have to be a member of one of the Ombudsman schemes and data protection register. ICO When I signed up to the letting agent it was only for letting out my property we never intended to sell at that time, I have never asked or will require them to be involved in the selling of my property! The tenant approached me directly about buying! This Is where I am confused normally you would have a separate selling contract with an estate agent but the letting agent has slipped this in as a clause and dosen't seem right that should take more money. Local Estate agents for my area are charging 0.5% including tax for selling and I'm very tempted to put it on the open market and not sell to the tenents. Link to comment Share on other sites More sharing options...
Dave A Posted March 7, 2014 Report Share Posted March 7, 2014 I would definitely challenge it, if the agents have no knowledge that you intend to sell the property, there is no way they have made any introduction for that purpose. Neither have they done anything in the way of work regards selling your property. Their involvment is merely coincidence, I would not pay or make any offer to pay this fee. Dave Link to comment Share on other sites More sharing options...
Melboy Posted March 7, 2014 Report Share Posted March 7, 2014 This clause on selling rights used to be fairly common but not so much now since the Foxtons legal case (Google the result ). However having said that it highlights the fact that ALL contracts should be scrutinised before signing up to them and to have clauses such as this removed. You will need to show your LA the copy of the Foxton's legal judgement and persude them that they have no rights to commission payments if you wish to sell your property to your existing tenants. Good luck! Link to comment Share on other sites More sharing options...
Helpineedsomebody Posted March 7, 2014 Author Report Share Posted March 7, 2014 This clause on selling rights used to be fairly common but not so much now since the Foxtons legal case (Google the result ). However having said that it highlights the fact that ALL contracts should be srutinised before signing up to them and to have clauses such as this removed. You will need to show your LA the copy of the Foxton's legal judgement and persude them that they have no rights to commission payments if you wish to sell your property to your existing tenants. Good luck! Thankyou for your reply, Have found some info on the foxtons case below. Press releases 2010 - OFT secures final high court order against Foxtons 19/10 22 February 2010 The OFT has secured a final High Court order against Foxtons Ltd preventing it from using certain terms concerning sales and commissions in its letting agreements with consumer landlords. More widely, the OFT is also writing to a number of letting agents and key industry bodies drawing their attention to the Order and making clear that letting agents are expected to comply with the law as set out in this ruling. The OFT will take necessary steps to ensure compliance across the wider lettings agent industry where appropriate. This Order against Foxtons follows a landmark judgment in the High Court in July 2009 in proceedings brought by the OFT under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). By its judgment the court accepted that all the terms the OFT complained of were unfair. Foxtons had until 29 January 2010 to lodge an appeal but did not do so. The High Court ruled that Foxtons' renewal commission terms were not transparent to consumers, so that they represented a trap and were therefore unfair, and ordered that Foxtons may not rely on these terms except where they remain instructed to manage the property. The Order also declared that the following terms are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords. Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation. Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant. Foxtons has made significant changes to its standard contract with landlords as a result of OFT intervention, including making the liability to pay renewal commission more transparent, reducing the commission payable on renewal, and limiting it to two renewals. Commission is also now only payable where the original tenant remains in occupation, and the landlord will get a pro rata refund where the tenant leaves the property before the date set out in his lease. The OFT will continue to monitor whether this contract operates fairly under the UTCCRs. Jason Freeman, Legal Director of the OFT's Consumer Group said: 'We welcome the finality brought by this Order, and the court's declaration that the terms we challenged are indeed unfair. 'This case, and the changes Foxtons has now made, sends a wider message to letting agents and businesses in general that important terms, particularly those which may disadvantage consumers, must be clear, prominent and actively brought to people's attention. Consumers should not be presented with a surprise bill for services they have not consciously agreed to.' NOTES The OFT commenced High Court proceedings against Foxtons in February 2008. The court's judgment on fairness of terms was given on 10 July 2009. See press release 83-09 and the Foxtons webpage. Following that judgment, the court made a further order on 17 December 2009 setting out the injunctions which should be granted in consequence against Foxtons. You can also find a copy of the Court of Appeal ruling on another issue which arose during this case on the OFT website here. This held that the OFT is empowered to stop traders from enforcing unfair terms in existing contracts with consumers. Renewal commission terms typically require a consumer to pay commission to the agent after the initial fixed period of the tenancy has expired and the tenant remains in occupation. The UTCCRs apply to standard contract terms with consumers. The UTCCRs protect consumers against unfair standard terms in contracts they make with traders. The OFT, and certain other qualifying bodies (such as local authority Trading Standards, national regulatory bodies, and Which?) can take legal action to prevent the use of potentially unfair terms. 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. The regulations say that a consumer is not bound by a standard term in a contract with a trader if that term is unfair. Ultimately, only a court can decide whether a term is unfair. The OFT has recently launched a market study looking at Consumer Understanding of Contracts to look into the extent to which consumers understand complex products and pricing. See press release 10-10. Link to comment Share on other sites More sharing options...
Melboy Posted March 7, 2014 Report Share Posted March 7, 2014 .................and there you have your information. The Order also declared that the following terms are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords. Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation. Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant. The last sentence applies to ALL LA's and EA's and not just Foxton's. A lot of LA's and EA's still try this on for whatever reason that may be but once you wave this piece of information under their noses they soon back off. Another reason to make sure your LA or EA belongs to a recognised professional body and not somebody operating from an understairs broom cupboard on their mobile phone and 1-Pad. Link to comment Share on other sites More sharing options...
Helpineedsomebody Posted March 7, 2014 Author Report Share Posted March 7, 2014 Thanks you information, I have a meeting on Monday with the Letting agent. I will let you know the outcome. Link to comment Share on other sites More sharing options...
Dave A Posted March 19, 2014 Report Share Posted March 19, 2014 What was the outcome here? Dave Link to comment Share on other sites More sharing options...
Mortitia Posted March 20, 2014 Report Share Posted March 20, 2014 It always amazes me the amount of people who say they 'became an accidental landlord' as if that releases them from any responsibility for signing contracts, tenancies that go wrong, claims for 3X the deposit for non protection, etc. etc. Here is another 'accidental' classic of signed contract without reading thoroughly and OP now wants out to suit himself. Link to comment Share on other sites More sharing options...
Grampa Posted March 20, 2014 Report Share Posted March 20, 2014 It is just the same with tenants. I would say no more than one of 15/20 tenants read through the tenancy agreement either when signing for the first time or on renewal. I guess we all have done it at sometime in the past but nowadays I read everything and it surprising how many shocked looks and a big sigh you get when you say "yes I would like to read it before signing" Link to comment Share on other sites More sharing options...
Melboy Posted March 20, 2014 Report Share Posted March 20, 2014 Having just completed contracts for my new tenants I absolutely emphasised to them of the importance of reading the AST contract through thoroughly before signiing and I said to them anything you don't like or your not sure about then say so....now and not later after you have signed. I gave them 3 days to read through and they both initialled each of the pages as having read and understood. That's the way to do it......... ( with apologies to Mr. Punch ) Link to comment Share on other sites More sharing options...
Richlist Posted March 20, 2014 Report Share Posted March 20, 2014 Well lets not forget the fact that many are just not capable of reading &/or understanding an Assured Shorthold Tenancy agreement. They are unlikely to ask for help (embarrissment) and will almost certainly NOT seek any legal or professional assistance. A large proportion of the population, can't read or write properly & a higher proportion can't do maths either. Instead of using Melboys system I usually give the tenants an additional sheet highlighting the main do's & don'ts in the agreement, using bullet points and written in easy to understand English. Neither method carries any guarantee that we won't get stuffed at some point. Link to comment Share on other sites More sharing options...
Mortitia Posted March 20, 2014 Report Share Posted March 20, 2014 or spell embarrassment Richlist Link to comment Share on other sites More sharing options...
Richlist Posted March 20, 2014 Report Share Posted March 20, 2014 Well done Mortitia.....you caught me out ! Whats even more embarrassing for me is that I was unsure of how to spell it so looked it up in my dictionary.....and I still got it wrong. Oh well.....I'm haviing a bad hair day as well today, hopefully tomorrow will be better. Link to comment Share on other sites More sharing options...
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