Do you read the small print?
Well, it seems that landlords using the services of letting agents to rent out their properties have been advised not to overlook the small print in their contracts. This is to help them avoid unintentionally assuming liability for costs they’re not supposed to pay.
The call comes from a recent investigation by The Telegraph. The newspaper revealed that landlords should be extremely careful about certain terms and conditions if they want to keep their returns intact.
One of the sections where fine print is particularly important is the ‘change of ownership’ clause, which was seen in many of the contracts examined. This clause allows the letting agent to continue to collect full tenancy fees years after the property has been sold. If it’s sold with a tenant in place, the original owner is obliged to pay fees as long as the property is occupied by the same tenant – even if the original tenancy period has ended. This means that the owner could be forced to pay for many years despite having nothing to do with the property or tenant.
Another clause that requires landlords’ attention is the ‘selling to a tenant’ section, which gives the agent the right to a share of the proceeds received by the landlord when selling the property to a tenant found by the agent – even if he/she did not contribute to the sale at all. Given the average UK house price is £254,000, a 2% fee would translate into £5,080 plus VAT in proceeds to the agent.
Landlords should also carefully consider the maintenance fees communicated in the contract. Many agents now tend to charge property owners for servicing and maintenance work arranged through contractors, adding mark-ups of up to 20% to contractors’ bills and seeking reductions of up to 60% for work on the property.
Have you ever been caught out by terms and conditions you were unaware of?