Residential Lettings Agency Terms and Conditions (Fully Managed Service)
These Residential Lettings Agency Terms and Conditions (Fully Managed Service) are for use by estate agents specialising in lettings and property management. 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 Residential Lettings Agency Appointment Form (Fully Managed 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 finding a tenant and setting up a tenancy. If the Owner is to manage the property, the “Letting and Rent Collection” or “Letting Only” version of the Terms and Conditions should be used instead.
The Terms and Conditions include provisions relating to Energy Performance Certificates and the Minimum Energy Efficiency Standards (MEES) which came into force on 1 April 2018.
The Terms and Conditions also include provisions relating to the mandatory requirements for letting agents to be members of a Client Money Protection Scheme which come into force on the 01 April 2019. This statement must be included if the Agent holds client money.
These Terms and Conditions have been updated to incorporate provisions relating to the Tenant Fees Act 2019 (in force 01 June 2019). In respect of properties in England, security deposits for new or renewed tenancies caught by the Tenant Fees Act 2019 are to be capped at five weeks' rent for a tenancy with an annual rent under £50,000 or capped at six weeks' rent for a tenancy with an annual rent of £50,000 or more.
Security deposits for assured shorthold tenancies in Wales are not currently capped but the Renting Homes (Fees etc.) (Wales) Act 2019 (in force 01 September 2019) gives the Welsh government the power to introduce caps in the future.
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 and completing a tenancy agreement) and the “Management Commission” (payable for the Agent taking on a management role during the tenancy). The Commission is paid in monthly instalments. If the Owner terminates the contract during the Management Period (i.e. when a tenancy agreement is in place), the Letting Commission becomes payable in full.
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 tenancy agreement is in place). These include preparing particulars, vetting potential tenants, handling the tenant’s security deposit, 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, and complying with statutory obligations regarding gas appliances, electrical equipment and fire safety.
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 tenancy. If the tenant remains in occupation after the expiry of the original tenancy, the Agent is entitled to receive additional commission (the “Renewal Commission”).
Clause 7 makes reference to the Agent’s complaints handling procedure and confirms which of the three approved redress schemes the Agent belongs to.
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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