Letting agent refusing to return keys & re-allocate deposit

[2Btoo]

Guys,

Tricky one here.

I have a flat which is privately let on AST which has now run onto a periodic tenancy.

I am on good terms with the tenant and she’s been there for a few years. I am in regular contact with her.

The tenancy has been excellent in every respect and the tenant has been exemplary.

The agent holds keys which I gave him and the deposit is lodged with the DPS in the agent’s DPS account.

I would like to give the agent the heave-ho as paying them each month for them to do nothing is not a good use of money. However the Landlord-Agent agreement has no provision for what happens if the landlord wants to no longer use the services of the agent mid-tenancy if the tenancy is a Statuary Periodic Tenancy; all it says is that the Landlord will be liable to pay the Agent fees which would be due should the tenancy be allowed to run to term. Given that it's moved to Periodic then there is no 'term'.

I have given the required two month’s notice to the agent by eMail who has accepted the notice. At the point that I gave notice (in October) I asked the tenant to start paying rent into my own bank account rather than to the agent. In November and again in December I paid the agent’s share on to him within a couple of days of receiving the rent from the tenant.

I have opened a conversation with the agent by eMail about how much we could agree to pay as a ‘severance fee’. The tenant is required to give two months notice to end the tenancy so a minimum I would pay would be 2xMonthly Agent Fee, and I have said that I am willing to pay more but he has demanded a fee of £1000 + VAT (i.e £1200). This is equivalent to about 10 months fees and hence excessive. Fair enough - this is negotiation and I am happy to negotiate with him.

However the agent is making it clear that he will not return the keys to the property to me, and neither will he re-allocate the deposit to my DPS account, unless I agree to his payment demands.

The agent has also contacted the tenant twice to instruct her to pay the rent directly to him. The wording of the second eMail which was sent earlier on this week is “I have reminded you both of the procedure, so for the sake of your deposit >TenantsName<, you must continue to pay your rent to us unless I instruct you otherwise. We have a contract with 2BToo to collect the rent.”

I am very happy to negotiate with the agent about the severance fee. However I am not happy that the tenant’s deposit should be used as a bargaining chip in this negotiation, nor am I happy that keys to my property should be used in this way either. A friend has suggested that doing these things is either theft or blackmail and that I should notify the police. I'm not convinced that this is the way to go but if anyone has any suggestions I’d be very happy to hear them. Thanks.

[Percy Cushion]

As I understand it, the terms of the initial AST still apply under the Periodic Tenancy. See what your contract with the estate agent says about termination as this will still apply.

[ATG]

This is what baseball bats are really for.

[LimmerickLad]

Just thinking aloud...........is there any reason why the tenant can't just give 2 months notice as required under the AST at which point the tenancy ends. ...ergo your contract with the agent als ends and the agent then has to refund the deposit to the tenant.. you then relet the property directly to the tenant (maybe little discount on rent as an incentive) who then gives you the deposit and you re-enter it in a Depsosit scheme yourself?

[davek_964]

LimmerickLad said:

Just thinking aloud...........is there any reason why the tenant can't just give 2 months notice as required under the AST at which point the tenancy ends. ...ergo your contract with the agent als ends and the agent then has to refund the deposit to the tenant.. you then relet the property directly to the tenant (maybe little discount on rent as an incentive) who then gives you the deposit and you re-enter it in a Depsosit scheme yourself?

I'm too lazy to check the actual text, but the agreement with my agency is something along the lines of : If we're your agent, and then we're not - and somebody who we talked to once moves in - you're paying us.

[LimmerickLad]

davek_964 said:

LimmerickLad said:

Just thinking aloud...........is there any reason why the tenant can't just give 2 months notice as required under the AST at which point the tenancy ends. ...ergo your contract with the agent als ends and the agent then has to refund the deposit to the tenant.. you then relet the property directly to the tenant (maybe little discount on rent as an incentive) who then gives you the deposit and you re-enter it in a Depsosit scheme yourself?

I'm too lazy to check the actual text, but the agreement with my agency is something along the lines of : If we're your agent, and then we're not - and somebody who we talked to once moves in - you're paying us.

Makes sense.

[skyebear]

Have you contacted the deposit scheme to ask them how they would handle this? They'll have encountered this scenario a thousand times. Show them the emails from the agent.

Given it's the tenant's money, and these schemes were setup specifically to stop agents playing silly buggers, they should have a process to move it to your account if the tenant agrees.

It would probably have been cleaner had you let the tenant pay the agent during the notice period, however you've paid their fees so they can't show any loss.

Change the lock(s) and tell them they can retain the old keys as a souvenir.

Edited by skyebear on Thursday 5th December 16:57

[Ham_and_Jam]

OP, how has the agent arrived at the figure of £1000+vat? They can’t simply make up a figure. Ask them where this is within the contract.

As also stated, ask the DPS what the best course of action is regarding the deposit in this situation. Im sure the agent cant hang on to it.

A third ‘long game’ option would be for the tenant to agree a new fixed term with the agent, 6 or 12m, and for you to terminate the agreement 2-3 months towards the end. This would be with the contract terms of only paying the remaining 2-3 months fees.

[surveyor]

Useful link for misbehaving letting agents

https://www.lambeth.gov.uk/housing/private-tenants...

[dibblecorse]

Ham_and_Jam said:

OP, how has the agent arrived at the figure of £1000+vat? They can’t simply make up a figure. Ask them where this is within the contract.

As also stated, ask the DPS what the best course of action is regarding the deposit in this situation. Im sure the agent cant hang on to it.

A third ‘long game’ option would be for the tenant to agree a new fixed term with the agent, 6 or 12m, and for you to terminate the agreement 2-3 months towards the end. This would be with the contract terms of only paying the remaining 2-3 months fees.

Yes they can, as has been stated his contract will roll for as long as he has these tenants in situ, he has no get out of jail free card, as per the terms his fees are payable ad infinitum.

He has asked to be released from the agreement, they have asked for £1000 + VAT as settlement of the contract, they are under NO obligation to do this and are doing so as 'goodwill'

I used to own and run a lettings agency.

[surveyor]

dibblecorse said:

Ham_and_Jam said:

OP, how has the agent arrived at the figure of £1000+vat? They can’t simply make up a figure. Ask them where this is within the contract.

As also stated, ask the DPS what the best course of action is regarding the deposit in this situation. Im sure the agent cant hang on to it.

A third ‘long game’ option would be for the tenant to agree a new fixed term with the agent, 6 or 12m, and for you to terminate the agreement 2-3 months towards the end. This would be with the contract terms of only paying the remaining 2-3 months fees.

Yes they can, as has been stated his contract will roll for as long as he has these tenants in situ, he has no get out of jail free card, as per the terms his fees are payable ad infinitum.

He has asked to be released from the agreement, they have asked for £1000 + VAT as settlement of the contract, they are under NO obligation to do this and are doing so as 'goodwill'

I used to own and run a lettings agency.

You can’t possibly know this unless you are the agent are the OP.
It depends on his contract.

[Acorn1]

As the ast is is on a rollover the term of the existing tenancy is technically indefinite until such time as the ast is surrendered or the tenant moves out.

I would ask the tenant to give the agent one months notice to terminate the ast and then do a new one privately between yourself and the tenant.

That way you will only be required to pay him one months fees, if the agents terms are as you say.

[skyebear]

surveyor said:

It depends on his contract.

Maybe OP could suitably redact the contract and post it, at least the parts pertaining to termination?

[LimmerickLad]

Acorn1 said:

As the ast is is on a rollover the term of the existing tenancy is technically indefinite until such time as the ast is surrendered or the tenant moves out.

I would ask the tenant to give the agent one months notice to terminate the ast and then do a new one privately between yourself and the tenant.

That way you will only be required to pay him one months fees, if the agents terms are as you say.

That's what I was suggesting but IIRC the OP said the contract covers it because it would still be a tenant that the agent spoke to previously therefore commission would still be due.

[davek_964]

LimmerickLad said:

Acorn1 said:

As the ast is is on a rollover the term of the existing tenancy is technically indefinite until such time as the ast is surrendered or the tenant moves out.

I would ask the tenant to give the agent one months notice to terminate the ast and then do a new one privately between yourself and the tenant.

That way you will only be required to pay him one months fees, if the agents terms are as you say.

That's what I was suggesting but IIRC the OP said the contract covers it because it would still be a tenant that the agent spoke to previously therefore commission would still be due.

The OP didn't say that. I said that - because my contract with the agency has wording to prevent you doing exactly this kind of thing. Perhaps the OPs is different, but I would expect most agencies to protect themselves against that.

[LimmerickLad]

davek_964 said:

LimmerickLad said:

Acorn1 said:

As the ast is is on a rollover the term of the existing tenancy is technically indefinite until such time as the ast is surrendered or the tenant moves out.

I would ask the tenant to give the agent one months notice to terminate the ast and then do a new one privately between yourself and the tenant.

That way you will only be required to pay him one months fees, if the agents terms are as you say.

That's what I was suggesting but IIRC the OP said the contract covers it because it would still be a tenant that the agent spoke to previously therefore commission would still be due.

The OP didn't say that. I said that - because my contract with the agency has wording to prevent you doing exactly this kind of thing. Perhaps the OPs is different, but I would expect most agencies to protect themselves against that.

Sorry I stand corrected

[2Btoo]

Guys,

Many very helpful replies. Thank you for every one of them.

LimmerickLad said:

Just thinking aloud...........is there any reason why the tenant can't just give 2 months notice as required under the AST at which point the tenancy ends. ...ergo your contract with the agent als ends and the agent then has to refund the deposit to the tenant.. you then relet the property directly to the tenant (maybe little discount on rent as an incentive) who then gives you the deposit and you re-enter it in a Depsosit scheme yourself?

Nice idea but this wouldn't end the tenancy; it would be deemed to have continued but moved from one agreement to another.

skyebear said:

Have you contacted the deposit scheme to ask them how they would handle this? They'll have encountered this scenario a thousand times. Show them the emails from the agent.

Given it's the tenant's money, and these schemes were setup specifically to stop agents playing silly buggers, they should have a process to move it to your account if the tenant agrees.

It would probably have been cleaner had you let the tenant pay the agent during the notice period, however you've paid their fees so they can't show any loss.

Change the lock(s) and tell them they can retain the old keys as a souvenir.

The scheme is the DPS and they told me that I can contact them with proof of ownership of the property and they will approach the agent with a view to moving the deposit from the agent's DPS account to my DPS account. However if the agent gives them 'a good reason' why the deposit shouldn't be moved then the DPS won't force the move.

I specifically asked the tenant to pay the last two months rent directly to me as I don't trust the agent one inch. I am 100% confident that if the rent had been paid to the agent then they would refuse to pay much or any of it on to me. The £1200 (and probably more) would have been taken by them and I'd have to fight to get it back.

Ham_and_Jam said:

OP, how has the agent arrived at the figure of £1000+vat? They can’t simply make up a figure. Ask them where this is within the contract.
>CUT<
A third ‘long game’ option would be for the tenant to agree a new fixed term with the agent, 6 or 12m, and for you to terminate the agreement 2-3 months towards the end. This would be with the contract terms of only paying the remaining 2-3 months fees.

They've plucked that figure out of thin air. Actually, they said they 'normally ask for a month's rent but they are happy to reduce it to £1000 in this instance.'

Agreeing a new fixed term is an interesting idea but would kick the problem down the road.

surveyor said:

Useful link for misbehaving letting agents

https://www.lambeth.gov.uk/housing/private-tenants...

Thanks surveyor. The agent is a member of The Property Ombudsman and I'm in conversation with them.

dibblecorse said:

Yes they can, as has been stated his contract will roll for as long as he has these tenants in situ, he has no get out of jail free card, as per the terms his fees are payable ad infinitum.

He has asked to be released from the agreement, they have asked for £1000 + VAT as settlement of the contract, they are under NO obligation to do this and are doing so as 'goodwill'

I used to own and run a lettings agency.

You are correct when you say that the contract will roll for as long as the tenants are in situ, although the fees can't be paid ad infinitum. If the agent is not providing a service once the agreement with them is ended then they cannot charge, therefore this would be an unfair term. Also, because the tenancy is periodic then it is unenforceable. As I understand it, the only way that an agent can charge in a circumstance like this would be to have a specified 'cancellation fee' in the Ts&C's, which there isn't.

I also used to own and run a lettings agency, and sold my agency to this agent's father. The father was good - really quite good - but has passed it to his son who is a different kettle of fish.

skyebear said:

Maybe OP could suitably redact the contract and post it, at least the parts pertaining to termination?

Absolutely. I'll put it in a following post.

[2Btoo]

As per skyebear's suggestion, here is the section of the agreement relating to cancellation. 'The company' = the agent. 'The landlord' = me.

Contract said:

- Whilst the property is let the company may terminate this agreement by
giving not less than two month’s written notice to the landlord [or his
representative].

- Whilst the property is let the landlord [or his representative] may terminate
this agreement by giving not less than two months written notice to the
company.

- Fees remain due and payable should the landlord dispense with the services
of the agent during the tenancy and/or if there is any extension of the tenancy
agreement (whether or not this is negotiated by >TheAgent<).

- Whilst the property is vacant the landlord [or his representative] or the
company may terminate this agreement by giving not less than two weeks
written notice.

- Under termination of this agreement the landlord [or his representative] and
the company are released from their obligations, without prejudice to the
rights of either party in respect of any breach of this agreement and with the
exception for any continuing liability of the landlord [or his representative] for
the fees applicable if a tenancy is continuing after the termination of this
agreement.

[Percy Cushion]

The last paragraph is important:

"with the exception for any continuing liability of the landlord [or his representative] for the fees applicable if a tenancy is continuing after the termination of this agreement".

What does the Contract say about the applicable fees payable if a tenancy is continuing after the termination of the initial agreement?

[2Btoo]

Nothing more than is quoted above.