Page 1 of 1
Refunding of agents commission and the diplomatic clause
Posted: Mon, 07 Jun 2010 1:28 pm
by pfjonesy
All,
I am in the process of agreeing a tenancy agreement, and whilst we have no agents commission to pay, the agent has sent me a ltter of undertaking for my review / agreement that if we need to exercise the 12+2 expat clause then we agree to refund the commission paid by the landlord on a pro rata basis. Is this standard, should I (or am I obliged) to agree to this?
Any views appreicated.
Cheers.
Posted: Mon, 07 Jun 2010 2:43 pm
by sundaymorningstaple
I would say it depends on how badly you want the
property. Is it a deal breaker for you? Him?
Posted: Mon, 07 Jun 2010 2:59 pm
by carteki
While I agree with SMS, It does seem a very logical request to make. The landlord has paid for a 2 year income stream. If you leave early, then that 2 year income stream has not materialised and he will need to pay another commission to obtain a new income stream. Should it be you or the agent who is responsible for the cost? Debatable - but ultimately it is your choice as to whether or not to leave early.
Posted: Mon, 07 Jun 2010 3:46 pm
by x9200
We did not have such clause in any of our TAs but I agree it is a reasonable request.
Re: Refunding of agents commission and the diplomatic clause
Posted: Mon, 07 Jun 2010 5:57 pm
by Mad Scientist
pfjonesy wrote:All,
I am in the process of agreeing a tenancy agreement, and whilst we have no agents commission to pay, the agent has sent me a ltter of undertaking for my review / agreement that if we need to exercise the 12+2 expat clause then we agree to refund the commission paid by the landlord on a pro rata basis. Is this standard, should I (or am I obliged) to agree to this?
Any views appreicated.
Cheers.
Guys
Correct me if I am wrong, OP said if he was to terminate the contract, the agent request to refund or pro rate the commission.
If this is the case, NO , it is not standard and you are not oblige. First of all the commission is between the agent and the landlord, you are the third party, under contract or tort if your TA has stated specifically third party liabilities albeit refund the commission then you have to adhere to it. If not, you are not liable, the agent is just wanting to compensate loss of income thru you.
To my understanding, commission paid is all up front after the TA is signed, refunding or pro rating it after the deal is not completed has no direct implication on you
Posted: Tue, 08 Jun 2010 8:51 am
by x9200
MS, to my understanding the agent has proposed an agreement to partly cover the commission by the tenant (under the mentioned circumstances). If the tenant (to be) agrees with it then he/she will be obliged. If not, then not.
I don't think neither it is a standard thing but I think it is fair.
Posted: Tue, 08 Jun 2010 8:52 am
by Mad Scientist
x9200 wrote:MS, to my understanding the agent has proposed an agreement to partly cover the commission by the tenant (under the mentioned circumstances). If the tenant (to be) agrees with it then he/she will be obliged. If not, then not.
I don't think neither it is a standard thing but I think it is fair.
Ok ,my bad ,I misread, yes I agree fair enough on both ends
Posted: Wed, 09 Jun 2010 10:41 am
by NBB2
Seems fair to me, and to my understanding, quite common, if not standard. After all, the dip clause gives you an escape hatch in the event of a premature bailing out of the lease by you. I mean, it may be outside your culpability, but you're still breaking lease.
So in return for this escape hatch, they request that you cover any costs that occur as a result of your premature bailing out.
So yeah, again, seems fair to me.