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Hi all,

First post i have done! I'm looking to get into the property market and joined property hub to further my knowledge. 

I have a rental property that i never really thought much about, i gave it to a agency who managed this for me and basically forgot about it. However the more i am learning about the property market the more i am interested in my options. The contact has come to an end and is currently on a rolling contract. I have a few options which i may look to explore, however i am unsure of potential implications.

The rent we get is around £200 less than the current market value. I am considering managing the property myself now i am looking to build a portfolio. The agent will not increase the income we receive, from what they originally offered 3 years ago i may add. Managing the property would be relatively straight forward as we have a decent team of professional tradesmen to undertake any works, if required. I would also look to get a contract in place.

Here is what i am considering/need advice on:

1 Give the agent notice and find a new tenant aiming to receive the additional income.

2 Give the agent notice and keep the current tenant. Is this legally practical or could i expect to face a lawsuit, or is there a procedure you need to follow?

3 How many months bond you be fair to request?

4 I am told you have to give two months notice on a rolling contract legally, however i have recently been told it is one month?

Look forward to receiving some solid advice from people who have the experience.

Thank you in advance.

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I would reply:

1. You need to know what your contract with the agent says about termination or you may find you owe quite a lot of money. Terminating your contract with the agency does not terminate your tenancy and unless your tenant is a problem why would you want to?

2. You can do this but again you need to know what your contract says. Incidentally, why won't the agent increase the rent - he is supposed to be working for you!

3. Deposit is a max of 5 weeks rent - by law.

4. Tenants gives 1 month notice, LL 2 months. If your tenant chooses not to leave you will struggle to evict.

 

From your post I would suggest you may need to do a bit of work appraising yourself of the legal aspects of being a LL before you sack your agent!

I would suggest you ask your agent why the rent doesn't go up and insist on a market rent being applied whilst you educate yourself about property management. If your tenant chooses to leave, that would be a good time to dump your agent and go it alone. There are, however, a raft of laws that you will need to follow to manage this property and from your post, I'm not sure you are up to speed yet!

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Hi Julia,

Thank you for taking the time to reply, It is appreciated.

1. I am not looking to terminate the contract. The annual term has come to an end and is currently rolling on a month to month basis. I would obviously advise the agent that i would be giving him the required notice period of the contract, if i decided to manage the property myself.

2. The contract states: should the landlord enter into an agreement with the sub tenant the agent shall be entitled to claim compensation. Would they only be able to do this if the contract was still in place or still rolling? 

(The landlord has stated that due to economic crises he would not be able to increase his fee to the sub tenant, which could leave the property vacant if they left)

What is a fair amount the agent should be making? £100, £200, £300 PCM?

3. Thank you.

4. I have subsequently looked at my contract which has a notice period of one month. Are you able to activate this at anytime during the month if the contract does not stipulate otherwise.

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Ok - so

1. The 'rolling contract' is still a contract so I believe your agent is entitled to compensation. Tell them your circumstances have changed and you are considering joining it yourself and then ask what the compensation would be. Given the tenant has been in for 3 years plus I don't think more than 3 months fees is appropriate but do you want to get into a legal fight over this? If the compensation is too high then perhaps you need to wait until the tenant leaves.

2. 

16 hours ago, billy-w10 said:

(The landlord has stated that due to economic crises he would not be able to increase his fee to the sub tenant, which could leave the property vacant if they left)

This doesn't quite make sense. I assume you mean the agent has said that the tenant can't afford an increase. If the rent is not far below market rent you would be shooting yourself in the foot if you lost a good tenant by putting the rent up. eg Rent at £600pm, rent rise of £25pm - one month empty would cost you £600 (plus all the start up costs of a new tenant) which would take 2 years to recoup at the new rent. If your rent is a long way below market rent as you suggest you can insist that the agent puts the rent up - but probably not all at once. If the tenant can't afford it he will either not pay (and then you have a problem and no income) or move out. Perhaps you could put the rent up a by £25-£50 pm over the next few years to catch up without stressing your tenant. I do rent reviews every year to ensure I am charging an appropriate amount. It does always result in a rent rise but it stops me ever getting too far below the average.

3. Agents usually charge a percentage - so if the rent goes up so do their fees. I have an agent who charges 7.5% (very low) - 10% is more usual and in some areas it can be 12 or 14%. Do some research in your area and see what other agents charge.

4. Again - not quite sure which contract you are referring to - yours with agent or yours with tenant? Assuming you mean contract with tenant usually notice has to be given on a rent date but regardless of what your contract says (the 1 month probably refers to the tenant giving notice) you have to give 2 months notice and if your tenant chooses not to leave you will struggle to evict at present as notice has been extended to 6 months for section 21.

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1. Thank you. That makes sense.

2. The current rent we receive is significantly below the current market value. The Agent has not offered an increase, and advised against us requesting one (as he would). If i manged the property myself i could get an extra £150-200 PCM. Over a years contract this is a nice sum. Pros and cons however, i know.

3.  Thank you. That is good information.

4. We have to give the agent one month according to the contract. It is correct this takes affect from the rent date. 

Thank you for your advise. It is appreciated.

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