Management Contract Frustrations
We frequently have sight of other companies’ management contracts and can at times be left scratching our heads.
For us, specialising in long term management we are not in it for a quick win and with this we are very careful of our brand and do all we can to be seen to be fair, whilst actually being fair.
Without being overly personal, we would guess that purchasing a property may be a Landlords biggest purchase and an owner would know that there is an exit at end of term, whether that be in 20, 30 or even 40 years from the mortgage start date.
What we have seen recently is a management contract structured in such a way that should you leave management with an agency there is an exit fee to be paid.
This fee is not relative to the years of management but to the term since the last let start date, ie should this agency manage the property for 20 years but at year 19 your initial tenant of 19 years moves out and a new tenant moves in, to end the management after 20 years loyal service an exit fee of one month’s rent is liable.
Should this be larger property in Edinburgh the rental value could be as much as £2,000, or more, on many properties. Naturally, with only having the one tenant for 19 years, there will be a significant saving from the letting agents’ point of view with costs saved in marketing, viewings etc through the initial 19 years but this does not influence the exit penalty.
The exit fee does reduce to a minimum of 40% of the rental value but with a fee to be paid to end management after any term means for me, this is a lifetime contract and not something that is in the Landlords best interests.
There is a better way
For us, to end management, we would naturally be disappointed but, there is only a 30-day notice period and no exit fee which we feel to be ethical, and fair.
What does your agent charge to end management contract?
Should you have any questions, please call on 01315107590 or visit our website https://winwinpropertymanagement.co.uk
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