Letting Agent cancellation fee

[NameChangeLandlord]

Hi everyone hope you might have some advice. I’ve namechanged for this incase any of the detail outs me.

We rent out a property with a 'fully managed service' provided by a letting agent, we pay them about 15% to firstly market it (which they did fine) and manage it (sort out repairs and so on as well as collect the rent) - which they've not done so well. Rent has been fine, but our tenant has been forced to contact me on more than one occasion about them not getting back re various issues. I have made a couple of mild complaints about this, but nothing serious.

DH and I are expecting pfb later this year, i'm being made redundant and we need to move back into the property. We'll of course give our tenant notice and I feel badly for them but it's really the only option financially for us. Don't know if this is relevant but the rent we receive for the property doesn't cover the mortgage (it never did, but we haven't increased the rent whilst our own has gone up, which hurts now) and I'm conscious that for the last 18 months or so she's been renting at below market value. This would have been OK, for the sake of being nice and keeping a good tenant but we really need the house now.

Looking at the contract we have with the letting agents, there's a note on the end of the small print saying that fees remain payable for the remainder of the fixed term period or until the tenant vacates the property whichever is sooner, subject to a minimum fee of £600. I've done some research about cancelling a letting agent contract as the landlord and I completely understand that if you decide to get rid of your letting agent but keep your tenant, they will be out of pocket and have an argument to be compensated for that. But i'm not clear whether this fee applies to us as a) we're not in the fixed term bit anymore and b) we're not taking the tenant's business away from them, presumably they will need a new property and they can help them find one.

Any wisdom on this?

[wowfudge]

From what you have posted, their fees only apply while the property is let so I would not interpret the clause as making you liable for any management fees.

Tell them your plans and use their services to serve notice correctly on the tenant though.

[Floundering]

As long as you give adequate notice to the tenant via them it should be OK.

But if you suspect they are crap,ensure you give notice to the tenant too to make sure they have enough time to find a new place- out of coursesy if they have been a good tenant it would be nice to give them more than the required notice as its bloody hard to find, do the paperwork & move all in 2 months or less.

[NameChangeLandlord]

Thanks both that's helpful. I hadn't thought of contacting the tenant separately and earlier but that's a good idea. 3 months notice maybe?

[wowfudge]

I would let the tenant know your intentions. You must give them two months' formal notice. You run the risk that the tenant finds somewhere sooner than the date you want to take the house back and serves you with one months' notice (their legal obligation to you). On the plus side, if the tenant gives notice they have somewhere to go and you are highly unlikely to have to evict them after the expiry of the notice you have served on them IYSWIM.

[NameChangeLandlord]

I don't mind if she finds somewhere sooner, I know it's difficult to match dates up exactly when you're renting and I won't penalise her. I just don't want to pay the letting agent £600 for what I as far as I can tell, is nothing at all.

[specialsubject]

two separate issues here - getting the tenant out and getting rid of the agent. Concentrate on the first. Give notice now - you can give more than two months if you don't mind the risk that they leave early. With a hair-flicking agent, get them to write the notice for you but make sure you send it to the tenant, recorded delivery.

the other risk (hope not, but not impossible) is that they won't go. Check your legal expenses cover. A court will rule in your favour but it will take time.

then worry about the agent, you can argue with them with somewhere to live.

the fact that rental isn't covering costs is not relevant to anything.

[JonathanRolande1]

Its a bit ambiguous, if you have paid them over £600 during the tenancy, this may nullify it!