Bit of a dilemma

[Selkirk]

I have a property with a LA, it’s mainly still with them as the T has been in situ from the start some 2 years. I took the full management scheme and it ain’t cheap some 20% per month but I have been able to forget about it which at the time I was very happy to do.

So the boiler packed up, bit annoyed really because they organised the gas inspection about 3 months ago and it was given the all clear, however, there was a leak which has resulted in what they said was an uneconomical repair, turns out this must have going on for some time, more than 3 months for sure, and everyone had missed it including the T. The bottom line is that I knew it would need changing at some point plus it’s now a condensing boiler with a proper energy rating etc, so can only be better all round.

Point is the LA rang me and said there was a problem and should they send one of their registered maintenance people round, because the boiler does the heating and water and its winter I said yes, this is a bit urgent really. They did come back later that day with the news and would I like them to organise a replacement boiler, obviously I said I’d have a quote first. Their quote was £1650 + vat (£1938). Flipping heck what a rip off, job done by the weekend by Corgi registered for £1050, not top of the range but not the cheapest either.

It has prompted me to review their ‘deal’ due for renewal in March (maybe I’ve been waiting for an excuse), I’ve done the past two contracts on a yearly basis and this year they’ve also introduced a tenancy renewal fee of £50 and a maintenance charge of 10% (!) too. That’s getting too greedy, so I’m going to drop them. However, I have a conscience and a wife; both say what about the T. I say its business they say it’s their hooooommmme.

I will definitely not be renewing with this LA.

Where legally or otherwise does it stand if I say to the LA that I’m not renewing just let me have the keys back and the T can renegotiate the tenancy directly with me. I am prepared to offer the LA a reasonable ‘finding fee’ in return for the referencing.

The LA agreement states at the end of our relationship the property will be returned to me vacant, it does also say in various places that ‘it’s at their discretion’ so although they may agree I’m expecting them to say no in which case the T would have to leave and become a victim through no fault of their own.

Any suggestions or thoughts would be welcome.

Cheers

Selkirk

[Trenners]

Hi Selkirk,

I am sure you will get lots of polarised views (mainly against the letting agent) on this forum !

Experience has taught me that it is difficult to compare quotations for the supply and fit of a new central heating boiler as prices can vary wildly due to the components used, the size of the CORGI company used, the speed of response etc etc -so I would not be too negative with the LA re: their quote for a new boiler versus your own quote. Having said that - 20% of the rent for a fully managed letting service is very high (and well above the industry norm of about 12%) + VAT.

If you decide to terminate with the LA then, I agree, that you must protect the tenant at all costs (because you don't want to lose a good tenant just because of your dispute with LA). So, contact the tenant and tell them that you will not be renewing your contract with the LA and ask the tenant whether they would like to rent from you directly. Get everything sorted with the tenant before contacting the agent.

Then contact the LA and tell them that you are terminating your agreement with them at the end of the term. I would not offer to pay them any more money (given you have been paying over the odds anyway) and tell them that you will be taking on the management of the property yourself.

You might receive threats from the LA saying you are in breach of contract - but most of this will be bluster - and I am pretty sure that the contract will not be enforceable in law. Speak to the manager and be firm but fair. Tell them you are terminating and no manner of threat will make you change your mind.

Good luck,

Mark

Make sure you get the tenant's deposit back from the agent as well - and make sure you secure it in a Government approved scheme.

[Simon Dewsberry]

Agree with Mark (...again !!!)

EXCEPT

"Experience has taught me that it is difficult to compare quotations for the supply and fit of a new central heating boiler as prices can vary wildly due to the components used, the size of the CORGI company used, the speed of response etc etc -so I would not be too negative with the LA re: their quote for a new boiler versus your own quote."

to get fair comparison you need to compare apples with apples so one prop may be a different price to another ....

But when you are getting quotes for the same job then a comparison IS VERY STRAIGHT FORWARD : assuming all are quoting for the same service and workload ??????????

Good luck ......and if they (LA) get stupid about it ...threaten to write to your local paper about their extortionate fees and "unfair practice" ....NO business likes that sort of attention .......

[GPEL]

Generally I agree with the above however you could ask the LA if they get a commission on the boiler work, what type they proposed to fit and why etc and do some comparative research on the interweb. Did you sign up to their terms of business? If so, breach of contract could come back & bite. Your contract may say recovery with vacant possession but enforcement of this is suspect, especially if you want your tenant to stay and they want to as the agreement is between landlord & tenant. Go the papers if you're absolutely certain the threat will work but beware that they have the right to reply, which the papers have to allow and they may just be paying a lot of money to advertize in that paper.

[Selkirk]

The boiler was done over the weekend, I got a price and a speedy turnaround so hopefully the T is happy, it goes to show that you must get quotes. I’ve just paid the guy and he said the LA would like him on their books and have already passed him a couple of jobs, that’s within a few days. So may be they’re not happy with their current contractors.

I would have told the LA first that I wasn’t agreeing a new contract before approaching the T because in the past the LA was very shady about me contacting the T directly, they said we’re your T and I needed to go through them, although I have the perfect excuse now to see the boiler they may make it an accompanied visit.

Am I within my rights to visit the T without their knowledge?

This is the bit I’m not sure on, can they say I’m in breach of the contract if it’s expired? I won’t be doing anything until March when the contract ends but I’ll need an alternative in place beforehand.

Hopefully, it won’t come to the papers but I want to be forearmed just the same.

Thank you for all your thoughts very helpful.

Cheers

Selkirk

[Simon Dewsberry]

Hang on a minite ....! This is your property .....LA is NOT the T ....unless you have an ast with them as T ....they are simply "mananging the prop for you .....you have control over prop as they should act upon your instructions with regard to the prop .........

Get well clear of them..

[Selkirk]

Rodent

The contract IS with the LA and they are T, they let it to a sub T. The deal is they guarantee the rent every month regardless of a T being in situ, it also includes all the T finding fees, inventory and the fact they'd continue to pay me even if they had to evict a non paying T of which they would meet the legal cost also. At the time I had just got rid of a non paying T which cost a packet on top of that there was a close family bereavement. I knew what I was doing to be fair and I was happy to pay the premium accordingly.

Now things have changed not just my position but the LA have introduced even more fees and are even using my fellow for their maintenance stuff so things are different there also, so it's time to change. Due respect given to LA's but I feel confident I can manage the risks. This has only come about as I feel I'm not getting value for money.

The paragraph of the contract which has raised all this is:

The landlord shall not enter into any tenancy agreement or contractual commitment in respect of the property with any sub T who has occupied the property either during or up to nine months after the terms of this agreement.

However, the word discretion also appears a few times and I hoping we can agree something but either way the LA are not being renewed it's just whether they'll agree to the sub T staying or not.

cheers

Selkirk

[Simon Dewsberry]

Aaaaaahhhhhhh Now that is different ! .....

So you need to terminate agreement with LA then find a way around :

"The landlord shall not enter into any tenancy agreement or contractual commitment in respect of the property with any sub T who has occupied the property either during or up to nine months after the terms of this agreement"

??? Hmmmmm well it does state that the "LL" shall not..... so you will be in clear breach of this if you then sign a new ast direct with T ....not sure if this could be considered an "unfair term" BUT it does not exclude your wife, brother, son, father etc from issuing a new ast with same T ......

GPEL ?

[GPEL]

No idea, not familiar with this type of agreement. Is it in Scotland? What's the agent's web site? Can't be an AST if the tenant is a company. Looks like you might need a clean break.

[Selkirk]

Sorry I should have explained the contract better. It was designed primarily to take over decisions on the LL’s behalf. It’s not Scotland – Southend in fact, couldn’t be further really except for the weather.

Agent website is http://www.northwood-southend.co.uk/ direct to the contract I have is http://www.northwood-southend.co.uk/html/platinum.html

Please remember I don’t have a problem with these guys and we've not fallen out.

Anyway, I went round there tonight with the LA blessing, I asked if I could see the work and ensure all was ok before I paid the contractor, they understood and were fine about it. My intention was to say to the T that I would be considering the new agreement (due in about a week or so) very closely, and to try and gauge how they felt but the reception I got from the T was not good, they were most put out that I had turned up at all. Having sat in the car for half an hour before, going over and over how to position things, I was surprised and annoyed to be honest. This has, however, cleared my conscience (thankfully) and I told the Mrs when I got home it’s definitely a business decision now. I will be telling the LA what I needed to do anyway, we’re done. Don’t get me wrong I would still be more than happy for the T to stay but the conscience is clear and the ball will land in the LA’s court as to whether they allow the T to stay or not, which was the position in the first place!

Really - many thanks again, it’s good to have informed opinions to consider.

cheers

Selkirk

[Trenners]

Hi Selkirk,

The additional information provided puts a totally different light on the situation. The T does belong to the LA. You will need to terminate the agreement with the LA and then you will need to find yourself another T. If you try and approach the T directly then you will be in very clear breach of contract and you can expect to be sued.

Northwood Residential Letting (to give them their full name) offer a rent guaranteed service whereby they will pay the landlord the rent irrespective of whether the property is rented out or not (very detailed terms and conditions apply). That is the reason why they are charging 20% management fees. They are taking a risk that the property might be empty and you are off-setting that risk by paying higher fees when it is let.

If you want to continue to have the safety of a rent guarantee (for what it's worth) then you will probably have to stay with Northwood because not many other agencies offer it. If you are prepared to absorb the void periods (when another LA is looking for a tenant for you or you are looking for a tenant yourself) - then SWITCH.

Good luck,

Mark

[Selkirk]

Thanks Trenners

This is how it looked to me and it's confirmed, as it stands it seems the sub T will lose out which I was trying to avoid.

cheers

Selkirk

[Simon Dewsberry]

Unless you use another family member as the "LL"....?

[GPEL]

They are a credible agency with a business model that suits some landlords but not others. You need to decide if it continues to suit your purpose and, if not, leave with the negatives and positives that may attract. No-one is under any obligation to change and accept a variation to the contract unless it is within the terms of the contract. Therefore, don't expect them to do something different because your goal-posts may have moved. Terminate the agreement with in the terms or accept continuation.