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Letting agent termination fee


landlord44

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We've been using an agent to let a property for the last year. Although they found us a very good tenant, we're not very happy with the (fully managed) service they have provided. Furthermore the tenants are very unhappy with the agency and have offered to sign up for another year on the condition that we do not go through the same agency.

However, I've just discovered that our agreement with the letting agency includes a termination fee of one month's rent in the small print: "A charge equivalent to one months rent plus VAT is payable on termination of the Full Management agreement, if the Landlord terminates the agreement and the existing Tenant remains in the property under either a Statutory Periodic Tenancy or a Fixed Term Tenancy agreement directly with the Landlord."

Is such a termination fee legal? And is 1 month's rent a reasonable charge?

Given that both we and the tenants are unhappy with the service the agent has provided, is there any way we can avoid this termination fee?

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Getting out of agents fee is one of the most common subjects on this site.

You signed a contract agreeing to this and yes it is perfectly legal. Think yourself lucky it is only 1 month's rent in some contracts there are no get out clauses and the landlord is left to negotiate a large fee.

Next time you want to use an agent for tenant find only - stipulate that in your contract. You did not want that at the outset though as you signed up for 'full management'. It is sooo easy to be wise after the event and when good paying tenants are in place.

In what way has the agent breached his/her contract to make you want to avoid payment?

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Yes, a much discussed topic and the short answer is that if you have a termination fee in your contract then you are liable to pay that fee.

The only way you could contest it under unfair contract terms is if you can prove negligence by the letting agent and back that up with written records etc.

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