Terminating a Letting Agent’s Contract

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

Letting Agent Contracts:

One common question asked by landlords is, “how do I terminate my relationship with my letting agent?”

For one reason or another, landlords sometimes wish to end their relationship with their letting agent and want to know how to go about it.

Requests to terminate usually occur for one of two reasons:

1 – At the end of the first term the landlord wishes to renew the tenancy directly with the tenant and take over management, thus avoiding an agency renewal fee.

2 – During the tenancy the landlord is not happy with the service being delivered by the agency, and/or the relationship breaks down completely.

The generally accepted principle with landlord – agent relationships, which has been custom and practice in the industry, is that once a tenant has been introduced and signed up to a tenancy, on a full management basis, the agent will be retained with renewal fees payable until that tenant leaves.

A contract is a contract and will be enforced by a court of law, so whatever you have agreed with your agent when your relationship commenced is something you are obliged to abide by, failing which the courts will award damages and costs against you.

Unless there is very poor performance and blatant breaches of contract the agent can hold the landlord to the agreement.

Good letting agents will have a strongly worded clause in their contract, something to the effect that: so long as one of the original tenants or licensees introduced by the agent to the landlord is still in the property, fees will be payable on-going, including on tenancy renewals.

Some agents will be willing to pursue the matter through the courts where a landlord unilaterally rescinds their contract, and the courts will usually enforce the contract where the terms are deemed to be fair and reasonable.

However, the Office of Fair Trading (OFT) and the courts do not like to see contacts tying businesses and consumers into open ended long-term agreements, so there are statutory rules and codes of conduct such as The Unfair Terms in Consumer Contracts Regulations 1999, and courts will decide if business contract terms are fair and reasonable.

Furthermore, all good agents are members of one of the main agent professional associations. These have their own codes of conduct offering landlords some form of redress should an agent’s conduct fall below that which should be reasonably expected of them. They also have client money protection measures in place (now a statutory requirement)  which protects landlords and tenancy deposits in case of an agent going into administration.

Regardless of the legal requirements, good agents will invariably be members of one or more of these:

– The National Association of Estate Agents – NAEA
– The Royal Institution of Chartered Surveyors – RICS
– National Approved Lettings Scheme – NALS
– Association of Residential Letting Agents – ARLA
– The Property Ombudsman Service

Also, ALL letting agents now have to register with 1 of 3 redress schemes, to ensure tenants and leaseholders have a straightforward option to hold their agents to account. Anyone who feels they get a poor deal from their letting agent will then be able to take their complaint to the redress scheme, and could receive compensation.

This has been a legal requirement since 1 October 2014.

Letting agent redress schemes can help you solve a dispute between landlords and their letting agents.

Landlords and also tenants can complain to the schemes, which help to mediate in disputes between landlords, letting agents and tenants over letting agent failings.

Once the letting agent’s internal complaints procedure has been exhausted, the landlord can take the complaint to one of these schemes.

The letting agent must clearly state which scheme they are members of. The three government-backed schemes are:

The Property Ombudsman (TPO)
Ombudsman Services Property
The Property Redress Scheme

A local council can issue a fixed penalty fine of up to £5,000 to any branch of a letting agency that fails to join one of these schemes.

Furthermore, as of now (July 2018) it will soon be mandatory that all letting agents have in place client money protection (CMP) insurance.

Termination Clause

It would be usual to expect that a landlord / agent agreement has a termination clause and a notice period, allowing for situations where either party wishes to end the relationship.

One way of doing this for the landlord, ideally in a friendly and amicable way, is to discuss and agree a once-and-for-all termination fee (equivalent to an introduction fee) which might be, for example, something like a three month or 6 month management fee equivalent.

These negotiations should be documented in writing in case the dispute ends up in court, but when a landlord has offered what is seen to be reasonable compensation for termination this would go in his or her favour. In any case most agents would not want to pursue the matter for small amounts of a few hundred pounds, so the offer of compensation is usually accepted.

As with all disputes, documentary evidence is the key to winning a case, so keep all correspondence and notes of discussions, especially where the agent has fallen down on his/her performance. Documentary evidence is the key to winning any dispute.

Landlords should bear in mind that agents do not charge fees for no reason: they have overheads including all the usual business staffing and office costs, insurance, professional fees etc to be covered.

What’s more, their fees don’t just cover the work they do or have done for you; they also cover what they might have to do, like turning out on a holiday week-end to fix a leaking pipe on a blown fuse.

Landlords should also bear in mind that with increasingly complex regulations around the management of lettings, a good professional agent is “worth his or her weight in gold” when it comes to making sure the letting is compliant with the law.

A let-only arrangement automatically terminates when the letting is complete and the tenancy commences, so in those cases there is no problem, providing the landlord has not agreed to anything in a written contract with the letting agent regarding renewals, renewal fees etc.

The Foxton’s case ruling had a bearing on renewal fees but only in as much as these should not be unreasonable, with no hidden terms tucked away in the small print.

Where there is no written contract between the landlord and the agent, a situation you would not expect when dealing with a professional agent, though still surprisingly common, the verbal contract cannot specify termination rules, renewal fees etc, so it’s just an opened ended arrangement where the landlord is expected to continue paying the management fees.

If it came to a legal argument a court would normally decide what contractual terms should be implied given the actions of the parties and what is reasonable in the circumstances given normal business practice.

Most agents, though, would not go to court over a few hundred pounds and risk damaging their reputation in the process.

Landlords should bear in mind when agreeing contracts with their agents that it’s best to have it in writing and caveat emptor – buyer beware – read the small print, negotiate and remove terms before signing if you are not happy, and ideally deal only with agents of repute.

Landlords should be particularly aware of contracted fees which are excessive or estate agency fees to be paid in the event of a sale of the rental property.

How do I terminate my agency contract?

1. Are you experienced enough and confident enough to take on the responsibilities of managing the property yourself, and do you feel you have good reasons to terminate both legally and morally?

2. The starting point is to read the contract carefully and see what you have agreed to. Are the contract terms fair and reasonable and is there a reasonable termination clause which gives you a get out.

3. Accepting that the agent is entitled to some notice and compensation; can you negotiate an amicable settlement?

4. Is the agent willing to hand over monies owed and the tenancy file with all the documents including tenancy application form, tenancy agreement, deposit protection details, gas check certificates, EPC certificates etc, and transfer management of the tenancy to you by contacting the tenant, including re-arranging standing order rent payment particulars.

5. Failing all this, are you well prepared if the matter goes to court, with good reasons and good documentary evidence to hand?

As a landlord, you own the property and you can do as you like within reason, after all the agent is acting for you at all times under your instructions. But if you expect to just dump your agent for no good reason, or simply because you have come to resent paying out fees, then you should remember there’s a contract in place whether written or not, and your tenant has also built up a relationship with the agent.

The tenant may or may not be happy to transfer dealing from the agent to you – some tenants prefer the independence and professionalism of an agent – and there’s all the hassle of convincing the tenant mid-tenancy of the safety of his/her deposit. At the end of the day you could lose an agent and a tenant as well.

Finally, good agents are like gold dust, as has been said above, if you have a good one than manages you property and tenants well, and saves you lot of hassle, why change?

How to Find a Good Letting Agent

MyDeposits Guide for landlords using a letting agent – see here

By Tom Entwistle, LandlordZONE®

If you have any questions about any of the issues here, post your question to the LandlordZONE® Forums – these are the busiest Rental Property Forums in the UK – you will have an answer in no time at all.

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.


  1. I am trying to terminate my agency agreement at the moment, but decided to wait until a break in tenancy. I informed the agent 6 months ago (January 2018) that another agent will be advertising for new tenants (student let) and managing the property in the new university year. The current agency has now contacted me out of the blue to ask if they will be managing the property in September 2018. I told them that I had already informed them (in writing) that another agent will be taking over the management after a break in tenancy. The agent is now wanting to charge £499+VAT as withdrawal fee, even though the tenants that will be moving in were found by a different agent. This seems grossly unfair. Has anyone else had this problem?

    • I think if you have given them adequate notice, usually 3 months and usually stated in the original contract then you do not owe them anything.

  2. Hi there.
    It’s really very informative stuff. What can be the best possible traits a letting agent should project to the people in need of a landlord or tenant?

  3. Hi If I have instructed an agent to let the property (tenant find and standard letting service), and I also instruct the property with a different agent to sell, can I withdraw from the contract with the letting agency or does it have to be on the full termination terms in the event that I find a buyer before I find an appropriate tenant? Thanks

  4. Hi. Is there a way out when dealing with an unreasonable landlord? Due to the COVID-19 pandemic most of the tenants lost their jobs and ended up vacating the premises. The landlord still expects to be paid full rent and has refused to bulge.

  5. What about ending the contract with the letting agency and removing all tenants – is that possible? Or would I still have to wait for any fixed term tenancy agreements to end. I want the agency and the tenants gone so I can just start fresh. I just wondered if the agency can just relocate the tenants and find them somewhere else to stay

  6. My husband has recently inherited a house that his late mother was renting out. The tenancy agreement is due for renewal in 2 weeks time. We have spoken to the current tenants and they have been really happy with the house and wish to stay, however the feedback regarding the agency has been really poor and from our own experience they have not been the best. Can I give notice to leave the agency

  7. Hello i need an advice. My agent is giving the tenancy fault information i put the rent for 1350 and they try to charge 1500 so the tenant did not agree so they ask her for the letter to leave. Is this a motive to terminate my contract with the agency. They only give me trouble. Somebody can help me.

  8. Hello,

    My letting agent has not payed my any rent for several months and the fail to acknowledge my emails or return my phone calls.

    I have written a letter to the tenant and to the agent informing both that I wish to terminate my relationship with the agent immediately (not delivered the letters yet).

    I read a paragraph in my agreement with the agent that if I terminate our agreement before the expiry date, I would be liable for a penalty fee which would include the monthly rent multiplied by the number of remaining months until the expiry of the contract. Plus any other fees/cost the agent feels they have incurred.

    I want to know, as it is the agent who has failed to maintain the rent payments and thus broken the contract by not paying me (I have never had a complaint from the agent) is the agent allowed to levy any such fees? Am I within my right to terminate the agreement without falling foul of the above paragraph?

    Thank you.

  9. Hi – I have terminated my contract with agent providing a rent collection service, and entered into a new AST as the landlord with the same tennant. The agent is demanding payment of his mi they fee all the while the same tennant remains in situ. Correct according to his Terms of Business, however such a clause is legally considered to be unfair. Does anyone have any experience of this and it going to court ?

    • currently in exactly the same situation however mine was fully managed. They are wanting 1 months rent as they found the tenants 2 years ago and they are staying in the property.
      Having sought advice this is an unfair contract term. I am currently responding to their claim through small claims court.

    • Hi
      I am in the same situation . I Have tried to speak with the estate agents but they have refused to end the unfair contract and state the fee is due as long as the tenant remains in place

  10. Gary Quaife
    Is your situation really illegal-if it is would really help me. Can you tell me where this info is located?
    I’m in the same boat. These people make money for doing nothing and then hide stuff in the small print with no conversation.

  11. Hello,

    Once we terminate the contract between us the landlord and and the letting company, do we have to make another tenancy agreement? Thank you in advance.

  12. My new estate agent has done a check on my first tenant and I agreed for them to take up tenancy. However, the tenant found fault with the property on the day moving in after giving the condition full marks only 2 weeks earlier when viewing. He wanted to be release form the contract, I said no, consequently he decided to move in and now a week later gave me an offer to release him again.
    Can I get rid of my agent, as I think they have not been on my side and didn’t check the tenant properly?
    I’d appreciate any helpful comment.

  13. I have signed a contract with a letting agent to find tenants for my property and to manage the property thereafter. It’s been 4 weeks and they still haven’t found anyone. Do I still have to pay the termination fees give my hat nobody is in the property? And they have only advertised the property on certain websites. There is a clause in the contract saying that ‘On termination of our instructions, you may be liable to pay us any outstanding disbursements and expenses including 2 months rental plus the management fee on the unexpired months remaining. This will be payable via the rental or directly by the Client upon termination.’
    This doesn’t seem fair given that They haven’t found a tenant.

    • Dear Mike,
      Pertaining to your question, was there a time period stipulated in the contract in of how long they had before in which to find a tenant’s for the property your letting out?

      If you are still unable to let the property, maybe we can help. Please contact me for further details.

  14. I am letting out a flat and asked for a rent increase.but my lodger has asked me if I can wait as he has not had a wage rise…I am happy with him but I have decided to end my contract with the management compan.I have given them 3 months notice but they have asked for 3 months of the payments 2550 pounds …… can they do this …

  15. I have a property with an agent under full management for the last 16 years. Recently I have a visit to the property and found lost of damaged already done. I have asked the agents to return the property for the last 6 months but they are not responding to my request. Is there anything I can do to get the property back? I am ok, if the current tenant continue to stay. Many thanks

  16. If I have not signed any contract with my letting agent can I dismiss him right away and what if my rent is going directly into his company bank
    Can I ask the tenant to stop paying and send directly to me


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