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Joshua
Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hello, I wonder if you can help please. I have been renting

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Hello, I wonder if you can help please.

I have been renting with private landlords (via a letting agency) since February 2012. The initial contract was for a year but we subsequently extended the contract for a further year. We are now 6 months through this year extension.

We would now like to leave the property in the next month or so and have been told by the letting agent that we can leave but we must continue to pay the rent until new tenants move in and we must also pay a £400 plus VAT fee for breaking the contract.

Is there anything we can do about this. I had hoped that just giving notice would be enough but there doesn’t appear to be a break clause in the tenancy agreement. Neither can I see a £400 fee mentioned for breaking the contract.

Would appealing direct to the landlords be an option?

Many thanks for any help you can give!

Joshua :

Thanks for your question. Please kindly RATE my answer when you are satisfied

Joshua :

Thanks. When do you want to leave please - as soon as possible?

Customer:

We are buying a house and this should be completed mid August so we would like to be out in September time really but a bit later would be ok

Joshua :

Thanks. Have you yet made a formal request to the agent or landlord to begin remarketing the property?

Customer:

We have not made a formal request but we informed the landlord of our intentions by text and phoned the letting agent to see what the situation is with leaving before February. That is when they told us of the £400 fee and paying the rent until new tenants arrive.

Joshua :

Thanks.

Joshua :

From what you say you have reviewed the tenancy in detail and can see no mention of such a fee in the same?

Joshua :

Have you received the above request for a fee by email or verbally?

Customer:

I can't see it. My wife phoned and they told her on the phone so verbally. I will contact them and ask if they can show me in the contract where it says about a fee. If they have it in the contract, as we signed it, then I guess it is our tough luck!

Joshua :

No that isn't the case. Such is a fee is likely to be unenforceable whether it is in the contract or not as follows.

Joshua :

The starting point is that you have signed a fixed tenancy and subject as follows you cannot unilaterally leave during that period as you have no contractual right to do so. However it is possible to escape early from the tenancy by asking the landlord to remarket the same. The landlord has a common law duty to mitigate his losses and as such must do his best to remarket the property. You would be liable for reasonable marketing costs notwithstanding the above associated with this together with any reasonable agency fees - agency fees cannot be any more than they would usually be and the agent cannot profit from your desire to leave early. The landlord cannot charge for his time as such unless he is acting as a professional agent. Your liability would end on the earlier of the end of your existing term or a new tenant being sourced to replace you - if that tenant pays a lesser rent than you you may be liable to pay the difference between the two but the landlord must do his best to replace you on the same terms including rent.

Joshua :

If he does not want to find a new tenant or is slow to do so or offers different terms - e.g. higher rent, he will be limited to demanding rent from you for no more than a period that would be reasonable to expect him to take to find a new tenant. Alternatively you could agree a fixed compensation proposal. The landlord cannot refuse to do anything at all or he will find that he is limited in the amount of continuing rent he can attempt to recover as above. Equally there is nothing stopping you advertising for a new tenant to replace you yourself. The landlord is bound to accept a new tenant unless he can show they are unsuitable - e.g. cannot afford the rent

Joshua :

4-8 weeks is normally sufficient time to find a new tenant in a buoyant rental market as we are presently experiencing and the landlord would likely be limited to roughly this period give or take in terms of rent he can demand if you wish to leave early.

Joshua :

As above the landlord is entitled to charge any reasonable agency fees to relet the property but no more so than is usually charged to let a property and the agents would need to substantiate any fees they claim by reference for example to their usual scale of fees for letting properties in order to demonstrate they are reasonable.

Joshua :

Any other fees can amount to a penalty which are unlawful at common law and under the Unfair Terms in Consumer Contracts Regulations.

Joshua :

See here (3.58): http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft356.pdf

Customer:

Thanks for this. So basically, we should expect to pay rent for another 2 months on giving notice and the letting agents could claim the £400 is re-marketing costs and I guess that would be reasonable. Anything above this is probably unfair and we could challenge?

Joshua :

You would be liable to pay rent until the point a new tenant was found or if the landlord does not bother to find one - i.e. places no advert on for the property - it is quite easy to check this these days by reference to the property websites - then the landlord is likely to be limited to somewhere between 4-8 weeks of rent due to failure to mitigate loss. The agency fees must be reasonable as above.

Joshua :

I am very sorry but I just have to briefly see a client. Could I trouble you to bear with me for a few minutes? I should not be more than 5 mins.

Customer:

Many thanks for this Joshua. I will ask the agency to confirm the fees and provide proof of their scale of fees. I suspect that they are pretty good at this sort of thing - it is a way of making easy money!

Customer:

No problem

Joshua :

Sorry I am back.

Joshua :

In deed. Essentially they are not allowed to profit from your request to breach the contract nor is the landlord.

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

No, that is great - thanks for all of your help

Joshua :

A pleasure.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Joshua and 2 other UK Property Law Specialists are ready to help you