Commercial Property Lettings Agency Terms and Conditions (Letting & Management Service)
These Commercial Property Lettings Agency Terms and Conditions (Letting & Management Service) are for use by estate agents specialising in lettings and management of commercial property. They set out the Agency’s and the Owner’s responsibilities and provide for commission to be paid to the Agency. The Terms and Conditions, together with the Commercial Property Lettings Agency Appointment Form (Letting & Management Service), create a contract between the Agency and the Owner.
This version of the Terms and Conditions should be used where the Agency will be providing a “fully managed” service, i.e. dealing with day to day management of the property, as well as marketing it for rental. If the Owner is to manage the property, the “Letting Only” version of the Terms and Conditions should be used instead.
The Terms and Conditions make reference to the Minimum Energy Efficiency Standard (MEES) which came into force on 1 April 2018.
Clause 1 contains definitions and in some cases refers to information contained in the Appointment Form.
The “Commission” comprises the “Letting Commission” (paid for finding a tenant who enters into a lease or licence to occupy) and the “Management Fee” (payable for the Agent taking on a management role during the lease term). The Commission is paid in monthly instalments. If the Owner terminates the contract during the Management Period (i.e. when a lease or licence to occupy is in place), the Letting Commission becomes payable in full.
Under the RICS Professional Statement 'Service charges in commercial property (1st edition)' RICS members or firms regulated by RICS, must charge management fees (for administering the services comprised in the service charge) on a fixed price basis.
Clause 2 covers the appointment of the Agent.
Clause 3 sets out the duties of the Agent during the Introduction Period (when the property is on the market) and during the Management Period (when a lease or licence to occupy is in place). These include preparing particulars, vetting potential tenants, handling any rent deposit (if required), collecting rent, chasing rent arrears and dealing with maintenance issues.
Clause 4 sets out the duties of the Owner. These include obtaining any consents that may be required from the Owner’s insurers, landlord or mortgage company.
Clause 5 deals with termination of the contract between the Agent and the Owner. There are different termination provisions for the Introduction Period (i.e. before a tenant has been found) and the Management Period.
Clause 6 relates to renewal or continuation of the lease or licence to occupy. If the tenant remains in occupation after the expiry of the original lease, the Agent is entitled to receive additional commission (the “Renewal Commission”).
Clause 7 makes reference to the Agent’s complaints handling procedure. If the agent belongs to a redress scheme (which is good practice, but not compulsory, for commercial property agents) details can be included here.
Clauses 8 to 12 contain standard legal interpretation wording and provisions regarding the service of notices and VAT.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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