Letting Agency Contracts Explained: Terms, Tie-ins and Switching

A letting agency contract — usually titled “terms of business” — is the agreement between you and your agent covering what service you are buying, what it costs, and how either side can end it. Most landlord-agent disputes trace back to three clauses: the notice period, renewal commission, and what happens to the tenancy if you leave. Read those three before anything else — ideally before signing, though in our experience most landlords read their terms of business properly for the first time on the day they decide to leave.

Here is what to look for, whether you are appointing your first agent or wondering what that document you signed a while back actually says.

What should a letting agency contract include?

At minimum: the service level (tenant-find only, rent collection, or full management); all fees, in pounds and as percentages, including VAT; the notice period to end the agreement; what the agent handles versus what stays with you (repairs authority, compliance renewals, inspections); and how client money is protected. A reputable agent belongs to a redress scheme (such as the Property Ombudsman) and a Client Money Protection scheme, and will say so in the contract rather than making you ask. And if the fees section needs a magnifying glass and a strong pot of tea, that is a design choice, not an accident.

What are the clauses to be careful of?

• Renewal commission — a fee charged every time the tenant stays beyond the initial term, sometimes for as long as the tenant remains, even after you have left the agent. This is the clause that surprises the most landlords, largely because it amounts to being billed every year for work done once, some years ago.
• Long tie-ins — notice periods of six months or more, or agreements that can only be ended at certain points. Three months or less is reasonable; anything longer deserves a question, and the question is “why?”
• “Sole agency” wording that outlives the service — obligations to pay the agent commission on a tenant they introduced years ago, however the relationship ended.
• Vague maintenance mark-ups — the right to arrange repairs with no cap and no disclosed mark-up on contractor invoices. A blank cheque, cheerfully written by you.

None of these clauses is illegal, but all of them are negotiable before you sign — and hard to argue with after.

Can I switch letting agents while a tenant is in place?

Yes — this is more routine than most landlords expect. The tenancy belongs to you, not the agent; when you switch, the tenant stays put, and the new agent takes over rent collection, the deposit registration, compliance records and day-to-day contact. The handover is mostly paperwork between the two agencies — and if your old agent takes longer to hand over the file than they ever took to return your calls, that rather confirms the decision. What you need from your contract is the notice period and any exit fees; what you need from your new agent is a proper handover process. We have written a full step-by-step guide on changing letting agent in Doncaster, including the letter to send.

How much notice do I need to give my letting agent?

Whatever your terms of business say — commonly one to three months in writing. Serve it properly (email plus post, dated) and diarise the end date. If your agreement has renewal commission or an exit fee, get the agent’s final account in writing before the switch date so there are no lingering claims afterwards.

What does a fair letting agency contract look like?

Short enough to read, specific about money, and easy to leave. Our own terms run on that principle: clear fees, no renewal commission ambush, and a notice period measured in weeks, not seasons — because an agent should keep your business by being good at the job, not by making departure painful. If you would like to compare your current contract against ours, send it over and we will tell you honestly what we see — including if your current deal is actually fine.

Kerrigans Property — family-run letting agents in Doncaster since 1978. ARLA Propertymark protected.