Management Agreement

Management Agreements between Landlords and Letting Agents.

Click here to Download Management Agreement

It is vital for both Letting Agents and Landlords to ensure that their Management Agreement does not contain any Unfair Contract Terms for either party. By ensuring this, it drastically reduces the chances of disputes arising because everything should have been made crystal clear. It is a damage limitation exercise that minimises legal actions being taken by either the Letting Agent or Landlord and any OFT involvement.

Letting/ Management Agents - Be very careful to study the agreement as the last thing needed, is to be reliant on certain clauses that may null and void any legal action being brought against the Landlord for unpaid or disputed fees. The Office of Unfair Trading Contract Terms Unit will enforce changes if the Management Agreement includes any unfair clauses.

Refusal to change the Contract, after receiving instructions from the OFT, will very likely lead to a "Stop Now Order" application to the County Court and an extremely expensive legal bill !

Landlords - Having read their Management Agreement always request changes, if you are not happy with certain clauses then do not hesitate in making everything perfectly clear. Below are a list of unfair terms from the OFT which can be checked to make sure that the Management Agreement does not contain any clauses, that contravene the rules.

Listed below are the unfair terms that the Office of Fair Trading state as contrary and should not feature in any Letting Agent's Management Agreements, ref: the Unfair Terms in Consumer Contracts Regs 1999.

THEY DO NOT LIKE! -Top Ten unfair terms:- Management Agreements

1 A term stating that the initial fee is non refundable. (Contrary to Reg 7)

2 A term that gives the Agent a "no holds barred approach" to being able to spend any amount of the Landlord's money on repairs (Reg 5). It is a requirement that a clause is included which allows the agent to use all of their best efforts in protecting the Landlord's interests. It must also include an exact figure, that had been mutually agreed, which cannot be exceeded without the Landlord's consent.

3 They object to any clause that allows the agent to have overall control over the Tenant having their deposit returned, if a dispute occurs.(Reg 5).

4 They object strongly to words and phrases appearing in the Agreement such as "dilapidation", “Indemnify” and “term certain”