Beware the Small Print on Letting Agents’ Contracts
What are the Key Clauses to Look Out For? • Change of Ownership – This clause allows the letting agent to continue charging full fees for years after a buy to let property has been sold. However, legal experts say that it would be difficult to enforce.
• Sub-Letting – Beware of handing over all responsibility for your property to a letting agent because you may be in breech of your mortgage terms and/or insurance policies.
• Selling the Property to the Tenant – This clause allows the management agent to claim a percentage of the property sale price if it is sold to the tenant (and the agent was the one to find the tenant in the first place).
• Maintenance Fees – fees charged by letting agents are a big problem in the industry, so go through your contract with a fine-tooth comb in search of hidden charges.
Read the Small Print Many of these clauses are rarely enforced in practice, but you do need to be aware of their existence. So make sure you fully understand a contract before signing on the dotted line because if any of the clauses are enforced, your profit margins would be severely affected.