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Bite-size best practice: Fixed contracts & notice periods

This ‘bite-size’ best practice feature has been written in response to some enquiries we’ve received from member agents who wanted to know what TPO’s view was with regards to letting agents extending a fixed contract with an extended notice period.

For example, if a tenant has a 12 month contract, can a letting agent impose a 3-month notice period that can-not be served until the 12-months have passed, which effectively makes this a 15-month agreement.

The OFT stance requires that an individual can give notice before expiry of the contract so that it expires at the end of the term. What the OFT considers ‘illegal’ is an agent saying the term of contact is 16, 18 or 20 weeks for example and adding the 14 day notice period on (such that it is effectively an 18, 20 or 22 week contract).

If a contract has expired then best practice would be that the agent advises the seller of the expiration – but no notice period would be required.

Any agency agreement should state precisely the terms of the arrangement, e.g. the length of contract, notice period, procedure for giving notice etc.

Further information can be found in TPO’s Code of Practice for Residential Letting Agents (Section3), which is available to download via: Code of Practice for Residential Letting Agents.pdf

Please let us know if you find this information useful and we will endeavour to provide further best practice features over the coming editions.
Categories: TPO News