How to have a contract cancelled where one party’s actions make the business agreement unworkable?

I am an overseas Landlord with a small portfolio of properties, and when in the UK last year entered into a buisness agreement for Full Managment for each property with a very large and long established renting agent.

The business agreement termination clause has financial penalties (1 months full rental + VAT per property) if I cancel but has no penalties if they cancel.

Within a few months the Agent tried to bludgeon me into resigning a new business agreement 48 hours before a new tenant was due to move into one of the properties just vacated. I refused to re-sign on the grounds that there was already in place a newly signed buisness agreement that included the condition for a roll over from one tenant to another. The Agent cancelled the new tenancy on the afternoon the tenants were due to move in – blaming myself for not re-signing their new contract.

From that time on the Agent has done a number of unacceptable and undesirable things as well as refusing to deal with any complaints I bring to them about their conduct or business practices.

I initiated several specific complaints as per their published complaints proceedure and the complaints were elevated and accepted to Stage 2 by their internal complaints apparatus.  However this process states that a formal response would be forthcoming within 15 working days. I have received nothing from them from that time on, and so in accordance to their complaints proceedure I then escalated my complaint to Stage 3 – addressed to the Managing Director, but once again have recieved no response letter, and now more than 15 working days having elapsed without the required response as per their own and the Property Ombudsman’s code of conduct.

I therefore asked for the Business Agreements to be cancelled without penalty due to the failure of the Agents to respond to or to address any of my complaints and grievances.  I also strongly suspect that should another tenant move out, that the Agent will not re-let the property without me signing a new Business Agreement – despite their clear failures to do any “management” at present. Their reply via our so called property manager is that we have to pay the cancellation fee before they will release the properties. I have already been forced to put the one property on the market for sale as they will not put any tenant into it under the current Business Agreement – which I consider a breach of contract – but again I get no reply or reaction from them on this matter.

However, more worrying is that I am still left with the agent taking monthly Managment fees without them being prepared to do anything for it. (Due to a number of instances where the agents failed to deal with maintenance issues e.g. despite the repeated calls of the Tenants and the continuing degredation of the property in that there was a seriously leaking roof – still leaking more than 3 months later that also took out the electrics to the shower unit, I have been forced to take on dealing with all the Maintanance issues myself for the sake of my Tenants). The tenants themselves have issues with the agent and are also unhappy with the dealings they have had with the agent – which is detrimental to myself as this is not conducive to keeping these good tennants for the long term. Furthermore the Agent has mishandled rental increases implemented – forgetting to update the tenants contracts when sent for renewal and continuing to mishandle and misrepresent the monthly rentals. Nearly every statement has an error – incorrectly reflecting the rentals due or the rental amounts being paid by the tenants – and despite continued requests to address these issues I receive nothing in response. From our personal contact with the tenants we know they have paid in full – yet the statement might say the rental amount due one month was just ?5 and the tenant only paid ?5 while the next month the amounts might be just ?10. Eventually I get the correct rental but with no explanation – but this is pure mismanagment and financial misrepresentation and not in my opinion not acceptable business practice. To say that the agent only functions at this time as rent collectors would be giving them too much credit, as our tenants are reliable and have always been diligent with their payments, yet there are still issues with the statements and the way the rentals are paid on to us.

In a nutshell – the Agent is sitting pretty – sitting back and collecting monthly managment fees without having to do anything, while at the same time refusing to deal with any complaints. If a tenant should decide to leave I will be left with yet another house standing empty and so how do I get the contracts nullified?  It is not acceptable that I should let them collect monthly fees for no managment and why should I be penalised for cancelling the contracts when the Agent is failing to provide the managment they should be? 

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Alasdair Taylor's Answer

To answer your specific questions, I would need to review the documentation (eg contracts and communications) and discuss the history of the dispute. Accordingly, you should seek proper legal advice in these circumstances. If you would like a referral to a suitable UK solicitor, let me know by email.

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