A former Countrywide employee trying to start up their own business has claimed that landlords who would like to become customers of the new firm are being hit by onerous ‘release’ fees.
The agent says that under a new clause, landlords terminating their management agreements with Countrywide have to pay the equivalent of two years of commission.
The former senior lettings manager with Fulfords, a Countrywide brand, told us that they left earlier this year to set up on their own, leaving of their own accord because of the new terms of business that Countrywide had introduced for landlords.
These include a clause which states: “If you terminate our appointment under our Full Management or Standard Letting Service but continue the tenancy with the tenant introduced by us in occupation, you must pay us a commission fee equivalent to the standard letting service fee for the duration of the earliest date of:
“a) 24 months from the date the tenancy commenced and (b) the date the tenant leaves the property.
“This fee applies even if the renewal or extension of the tenancy is negotiated by another agent.”
The ex-Countrywide agent told us: “Once my landlords heard that I had started my own business they called me to say they would like to transfer their business which is great.
“However all those landlords that have signed these new terms of business which were introduced just before I left, have to pay a redemption fee equivalent to two years of management fees.”
In once case, the landlord has given three months’ notice, meaning the new business can collect the files in October, when the initial six-month AST expires.
However, the landlord has allegedly been told that she will need to pay Countrywide £1,900 at that point.
The ex-Countrywide agent said: “I do know that some agents will charge a release fee, but two years worth of commission?”
The agent also said that under the new terms, Countrywide’s minimum management fee is now 13% plus VAT, regardless of the expected rent.
The agent also said that there is now an additional monthly charge of £9.50 plus VAT to cover landlords for: HMO licensing; deposit/deposit replacement service; service of notices; checking smoke and carbon monoxide alarms at the start of the tenancy; and something called “legislative horizon scanning”.
EYE has approached Countrywide for comment.
Comments (28)
The Dino’s next great strategy after nigh forcing people to see brokers before seeing a property to buy, its now the 2 year get out clause on property management! Which will of course paint the industry in a great light and will lead to more scrutiny…………. thanks Dino’s.
Where else is there a 2 year get out clause……………………….can you imagine……………………………
Yes caveat emptor and all that, but really, we all know this is just one of the last rolls of the dice
unfair clauses on a contract plain and simple? Just needs one to let it go to court and the house of cards again will come tumbling down.
Think this might apply here…
Under the law, a ‘consumer‘ is someone who isn’t acting for the purposes of a business when they deal with the trader. This means that a business that buys goods isn’t counted as a consumer under the Consumer Rights Act, and business-to-business (B2B) transactions don’t have the same protection
Consumers have a habit of not wishing to go that far and roll over, when their legal adviser makes is clear on the likelyhood of failing and costs.
On further investigation, in regard to the relationship between landlord and agent, it looks like it depends on what kind of landlord you are as to whether you are classed as a consumer…
“Insofar as contracts with letting agents are concerned, they will often be treated as a consumer – and so will be protected by the consumer legislation.
In particular, landlords who have another job, so managing property is not their main business, will almost certainly be treated as a consumer – even if they have quite a large portfolio. There is no rule, for example, which says that landlords will not be treated as a consumer if they have more than five properties. If their main occupation is something else – for example, if they are a doctor or an actor – then they will be treated as a consumer and will be entitled to take advantage of the consumer protection laws. However, a landlord will NOT under any circumstances be treated as a consumer if his property is managed through a limited company. A limited company is always treated as a business.”
This is from a landlord law blog so I can’t vouch for how reliable it is but it does make sense. If you’re a full time landlord or have property in a limited company then the Consumer Rights Act won’t protect you.
So ……. ??????
>So ……. ??????
So my first comment was only partly right and I was correcting myself.
Surprised, given that it’s your profession Woodentop that you didn’t know that consumer protection regs. would apply in a lot of cases.
Your earlier comment being “Try proving it in court and the judge will always say ….. you signed it.” is completely wrong.
When a consumer signs an unfair contract they are protected by the law. Landlords who qualify as consumers, and I bet you there are a large number of them, can rely on the consumer regs. which deal with unfair terms in contracts.
You should hang your head in shame for not being on the ball here.
You talk utter tosh. Please do not try and speak (a) on a subject you do not know and (b) Try and tell an industry who are experts in their field that you know better. You don’t.
Unfair terms and conditions have set precedence, you know nothing about.
As to your failed attempt to try and know something, my question “So .. ???” refers to what are you saying, the terms are unfair … if so please supply specific evidence in law to confirm ….. that will be impossible in this case. We are not talking there are laws to protect (that is not in dispute), YOU have to show that law has been broken …. numpty.
You should hang your head in shame for not being on the ball here.
As is your normal manner of posts, you have tried to make up something, in your favour of your prejudice towards estate agents and failed miserably. You really are turning into a horrid TROLL.
Now one might think the Duck is an expert, he certainly is not …….. very good at jumping in with two big feet and then when caught with his pants down, this is what happens ……. oh and he has no professional qualifications and knowledge of law is his ability to google …. this was his attempt at a data protection incident, is he right or wrong is not the question, it is the content of his typical TROLL postings
cyberduck46 May 17, 2019 at 16:01
I do have experience in matters of law including data protection law. This law is not specific to Estate Agency so the fact I don’t have any experience of being an Estate Agent is irrelevant. I know a fair bit about Estate Agency too. It’s not rocket science as demonstrated by the low barrier to entry.
Reading statute is just a matter of comprehension so I think I’m entitled to an opinion.
Quite happy to explain this to you as well after having to help you out the other day over something or other. Oh yes, you were incorrectly thinking that the law relating to unfair consumer contracts would be ignored by a Judge
Now where does it say above “that the law relating to unfair consumer contracts would be ignored by a Judge” ??????????????
Woodentop May 17, 2019 at 18:44 #5
Ah ah, off we go again, caught with your pants down as usual. Sling some mud and no your are definitely wrong. That is precisely what a judge will say, “you signed the contract” when unfair terms and conditions are claimed. Misrepresenting the dicussion to your own end when I asked what evidence that the law had been broken, not that there was no law. I have been present more times than you could care to imagine and not as an estate agent. What professional qualification do you have in estate agency and law, that was my question. You confirm you have none, yet you are the oracle on the subject from your limited and naïve experience and prejudice!!!! going on google.
The wording states “but continue the tenancy” therefore is there a technical defence if you end that tenancy but then create a new one with a non-countrywide AST agreement as you could potentially argue it’s a new period of tenancy/tenancy itself?
Nope.
Fair enough 🙂
It is simple read the terms and conditions. Always look at smaller companies who appreciate your custom and often give by far a supeior service. Are you sure its the company for you if you dont have your call answered quickly and by a person? After all “your call is important to us” on an answering machine tells its own story. Your call is not important to them but your money and your business is.
Is it unfair terms and conditions? Try proving it in court and the judge will always say ….. you signed it. Then CW barrister will say they have so many other landlords that have signed and not complained. Don’t get me wrong, I don’t think they are fair terms and shouldn’t exceed the tenancy fixed term period but that is CW, their vendors or landlord contracts have always locked people in, but I also know many who have stood up to them and walked and CW have rolled over, fear of bad publicity?
Sorry but you guys are looking in the wrong direction, you should be looking at the pirate, he doesn’t like the way CW are doing things which is trying to build and maintain business and god forbid, make a profit!!
Landlords aren’t stupid and mostly they know what they are signing but this person left to start his own business with the helping hand of taking away his ex employers business and he is complaining about basically how hard it is to steal them away! That’s bad business, I sold my business and quite a few of my clients wanted to follow me but I had to explain why they couldn’t.
If u weren’t happy, then u leave to, in your case start your own but u don’t start that by nicking not only someone else’s client but their tenant too! Am I the only one who thinks this is wrong!!
You are correct. The fee CW is between the LL and agent. It has nothing to do with the new boy setting himself up and trying to take away clients of CW. We also have fees due if a LL wants to terminate our contract but keep the tenants otherwise they would let us do the hard work of setting things up with a nice tenant pay 1 mths commission and then DIY and we would be out of business.
So the fee has to be enough to cover the work you have done and to make a profit. We charge a 6mths commission to end our involvement if a landlord wants to take it over during a roll on or the full commission to the end of the fixed period if during the first tenancy min of 12 mths.
We want to keep our landlords and do for many years (decades ) because they want to stay with us as we work hard, do a good job and are sensible with our fee structure. ie being a good business.
>If u weren’t happy, then u leave to, in your case start your own but u don’t start that by nicking not only someone else’s client but their tenant too! Am I the only one who thinks this is wrong!
That was my impression too.
>The ex-Countrywide agent told us: “Once my landlords heard that I had started my own business they called me to say they would like to transfer their business which is great.
Wonder how they heard? His landlords?
Happens all the time though. I’ve got a friend who sells space on container ships and every time he goes to a new job he takes clients with him. Part of the interview process.
Estate Agents beware. Is your lettings manager going to leave with your clients?
Landlords going to get a shock when all these new rates come in. Capital Gains aside it’s a big part of the income and paying tenant finding fees and markups on repair fees is going to be hard to swallow and compounded over years will produce a much lower return for Landlords.
Can they put rents up? It remains to be seen. Not sure how Councils calculate their Local Housing Allowance figures. I used to know how they calculated their local reference rents years ago under a different system and it was connected to local rents. Perhaps this tenant fee ban will come back to haunt the Government (although I’m sure they’ll just change the rules).
Absolutely spot on. Attempting to ‘ steal’ existing Landlords from your former employer is not only unethical but illegal i suspect as most employment contracts will contain a clause making this very clear and believe me someone with deep pockets like CWD will go after this guy with everything they have if they can prove he has ‘pinched’ just one customer with the old ‘ i can do what you currently have for half the fee etc etc ‘. Best of luck.
It is normally in their staff terms and conditions of employment.
I agree its very wrong but ‘deep pockets’??
To be honest, the level of legislation and compliance agents need to do 13% is a fair price. Break down the number of laws and acts you have to follow to be compliant and stay on top of. Last time i checked it was well over 200.
It is a bit steep when they want to take away from the agent but sadly when you have cowboy agents offering fully managed at 5% you need some way of keeping the LL especially once you have set it up correctly.
Its also in their T&Cs so just do what most people are too lazy to do which is read what you sign.
Profit is not a dirty word. You are allowed to make money despite what the Government and pressure groups say.
A matter under CPR if individual Landlords want to challenge it. Far too onerous a condition in my view
In my mind this is an example of agent greed which the government is using as an excuse to introduce a host of legislation to control and restrict agents. Unfortunately, once again, the many who are professional, fair, honest and reasonable will be hit by the sledgehammer required to control the few.
Hi Bert,
”Greed” or not, ultimately the client signed the agreement. I would personally not sign any binding agreement without having thoroughly read and understood it first…
However, IMHO the current Govt’s. imposed involvement/control/increasing regulation in the property sector has absolutely nothing to do with ”improving the sector”/”Rogue Landlords”/”Rogue Agents” or anything else along those lines. This current Govt. is actively dismantling the PRS, and attacking both Agents and Landlords (at both ends), as well as regularly disseminating propaganda (via their partner channels- Shelter, CAB, etc. etc.) on a seemingly naïve public (whom have bought into it, hook, line and sinker) to help achieve this.
We are currently at the mid-point of a Machiavellian masterpiece, the result of which will be significantly increased wealth for the very (and I mean a handful) few…to the detriment of hundreds of thousands (if not several million) members of the general public…
“Legislative horizon scanning” love the brass neck of this.
The foxtons v the now defunct OFT is a good place to start
I cannot imagine countrywide have complied with everything stated in their terms of business so a landlord could point out failures and challenge Countrywide in pursuing the cancellation fee through court
I cannot imagine they will want to chance court cases because if they lose it will open the floodgates to others wanting to leave
Businesses sign onerous agreements all the time and there will always be companies who will charge what they can get away with.
What about the thousands of poor souls trapped in RM contracts? 🙂
Or the first round of OTM customers.