Agency's extortionate exit fee for moving out early :(

[ttheli]

Hi Guys,

I really need your help with this one. My partnet and I signed a 2 year contract on a 1 bed flat which would end on 24 Oct 2011. We had a break clause stating that we can give 2 months notice not until 24 April 2011. However, one of the clauses states : 'The tenants agree that upon receiving the Landlords consent to replace one or more individuals on the contract they will pay an

administration fee of £287.50 to the Landlords agent to cover the process and the drawing up of the new Tenancy Agreement.' Our relationship just ended and he moved out and found a new place to live. Now the agency is forcing us to pay an 'exit penalty fee' of £500.00! Nowhere in the Tenancy Agreement does it say that this would be the case. They say that if we don't we would have to find a replacement. That is not what we were told before we signed the contract. We were told they would find a replacement hence the administration for of £287.50.

They also say that this £500 is because this agency are paid commission from our Landlord for finding tenants.He paid them the total commission upfront based on the length of our contract.

We are ending the contract early so he has paid them too much commission.

He is owed the difference between the commission the agency have earnt so far and the commission he's paid. This comes out of our deposit. (?)

 

They quoted this clause: '[The Tenants agree] to pay and compensate the Landlord fully for any costs expense loss or damage incurred or suffered by the Landlord as a consequence of any breach of the agreements on the part of the Tenant in this Agreement and to indemnify the Landlord from, and against, all actions claims and liabilities in that respect'

We are not in breach of the contract we only ended it earlier and hence pay that admin fee. They say if I go to the Claims Court I will lose the battle. I don't know what to do And does that mean that we would be paying the £500 to the Landlord and the additional £285 to the agency?

Please help

[rebel11]

Hi tt

 

The guys will advise as soon as they are available. Heres some info in the meantime, http://england.shelter.org.uk/get_advice/renting_and_leasehold/renting_agreements

[Planner]

Hi Guys,

I really need your help with this one. My partnet and I signed a 2 year contract on a 1 bed flat which would end on 24 Oct 2011. We had a break clause stating that we can give 2 months notice not until 24 April 2011. However, one of the clauses states : 'The tenants agree that upon receiving the Landlords consent to replace one or more individuals on the contract they will pay an

administration fee of £287.50 to the Landlords agent to cover the process and the drawing up of the new Tenancy Agreement.' Our relationship just ended and he moved out and found a new place to live. Now the agency is forcing us to pay an 'exit penalty fee' of £500.00! Nowhere in the Tenancy Agreement does it say that this would be the case. They say that if we don't we would have to find a replacement. That is not what we were told before we signed the contract. We were told they would find a replacement hence the administration for of £287.50.

They also say that this £500 is because this agency are paid commission from our Landlord for finding tenants.He paid them the total commission upfront based on the length of our contract.

We are ending the contract early so he has paid them too much commission.

He is owed the difference between the commission the agency have earnt so far and the commission he's paid. This comes out of our deposit. (?)

 

They quoted this clause: '[The Tenants agree] to pay and compensate the Landlord fully for any costs expense loss or damage incurred or suffered by the Landlord as a consequence of any breach of the agreements on the part of the Tenant in this Agreement and to indemnify the Landlord from, and against, all actions claims and liabilities in that respect'

We are not in breach of the contract we only ended it earlier and hence pay that admin fee. They say if I go to the Claims Court I will lose the battle. I don't know what to do And does that mean that we would be paying the £500 to the Landlord and the additional £285 to the agency?

Please help

 

A little confusing!

 

1) The breakclause - what is the wording of the breakclause? does the break clause include the £287.50 fee? or is this in a seperate clause - if it is in a seperate clause then does the wording link them in anyway? - A break clause is normally free to action - I think/you the agents/your Gran are incorrectly linking two unrelated clasues? - Therefore if you have actioned the breakclause correctly, there should be no fee at all. I would stongly dispute this - all the way to the TDS arbitration OR Court if necessary. The agents commision has nothing to do with you.

 

2) As you are ending the contract early (I assume you had a shared tenancy agreement a paid a single amout for the property - as aposed to an agreement each and two seperate payments) there is no need to find a replacement tenant, therefore the £287.50 fee is also not payable. Again I would stongly dispute this - all the way to the TDS arbitration OR Court if necessary. The agents commision has nothing to do with you.

 

In a nutshell - the agents are trying it on.

 

A calm letter saying that as you have neither broke the tenancy agreement or are intending to find a replacement tenant they will be getting a grand total of £0 from you. The Nerve!

 

2)

[ttheli]

Hi,

 

Thank you for your message!

 

1) The break clause is at the beginning of the agreement and the clause mentioning the £285 fee is a separate clause mentioned further down the agreement. The break clause says: 'This agreement may be terminated early by either the Landlord or the Tenant upon serving Two months notice in writing not to be served before 24/04/2011(...)' Thing is we are moving before the break clause come into effect.

2) We had one agreement, both names were mentioned in it though the £285 fee is a one off total fee not a per person charge. That's how I read the clause.

 

You mentioned we have not broken the agreement. Is that so? I mean we are ending it sooner than the break clause allows us to so in a way we do. I don't mind paying the £285 between us as this is what we gareed to do but I simply don't understand their reasoning and telling me we would be having to find a replacement if we don't

[Planner]

You have broken the agreement if you are not actually using the breakclause - sorry I didnt pick up on this in your first post. Subsequently the amounts appear more reasonable.

 

Whats more cost effective - activating the breakclause correctly and paying the rent until April OR paying the £500 + £285? (Keep in mind your also likley to be responsible for rent until a new tenant is found)?

[Steve__M]

I think the term below is meant in situations where one or more tenants want to continue the tenancy but with new housemates. The text implies that the tenants have found a replacement and have successfully obtained landlords agreement to the replacement. It does not say that agent is responsible for finding the replacements. The agent is only responsible for the admin.

 

Possibly you could get away with just paying the 287.50 if you yourselves were to find replacements, but you'd need to check.

 

As planner points out you need to be clear what the agent thinks you are responsible for, particularly with respect to the ongoing rent until the property is reoccupied.

 

The tenants agree that upon receiving the Landlords consent to replace one or more individuals on the contract they will pay an administration fee of £287.50 to the Landlords agent to cover the process and the drawing up of the new Tenancy Agreement