Letting Agent / Property Management Agreement

Overview

A letting agent / property management agreement is the contract by which a landlord instructs an agent to let and/or manage a rental property, in return for a fee. It is separate from — and usually sits alongside — the assured shorthold tenancy agreement the agent negotiates with the tenant: this document governs the relationship between the LANDLORD and the AGENT, not between the landlord and the tenant. Regulatory framework since 2019: since 1 October 2019, all letting agents and property managers in England handling landlords' or tenants' money must belong to an approved client money protection (CMP) scheme (unless money is never held, which is uncommon for a full management service). Separately, agents must belong to a government-approved redress scheme (The Property Ombudsman or the Property Redress Scheme) so landlords and tenants have somewhere independent to complain. These are legal requirements, not optional add-ons, and a landlord should verify both before instructing an agent. Let-only vs full management: the agreement should state clearly which service is being provided. 'Let-only' (or 'tenant find') covers marketing, referencing, and setting up the tenancy, after which the landlord manages the property directly. 'Full management' additionally covers rent collection, day-to-day maintenance, deposit registration, and handling repairs, gas safety and EPC compliance, inspections, and end-of-tenancy processes. The scope drives both the fee and the agent's day-to-day authority. Fees and transparency: since the Tenant Fees Act 2019, agents cannot charge tenants most fees (referencing, admin, inventory fees etc. are banned as against the tenant) — permitted charges from tenants are now essentially limited to rent, a capped deposit, a capped holding deposit, and a few narrow exceptions (e.g. a reasonable charge for a lost key, or contractual damages for early termination). The agent's fee for the SERVICE TO THE LANDLORD, by contrast, is a matter of private contract and should be stated as a percentage of rent (for management) and/or a fixed fee (for let-only), inclusive or exclusive of VAT. Statutory and safety compliance: where the agreement covers full management, it should specify who is responsible for arranging the annual gas safety check (Gas Safety (Installation and Use) Regulations 1998), the Energy Performance Certificate, electrical safety inspections (Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020), smoke and carbon monoxide alarms, and serving the tenant with the prescribed 'How to Rent' guide — all of which affect whether a subsequent section 21 notice would be valid. Deposit handling: if the agent takes a deposit, it must be registered with a government-approved tenancy deposit scheme (TDS, DPS, or mydeposits) within 30 days of receipt, and the prescribed information served on the tenant. The agreement should state whether the agent or the landlord is the deposit holder for these purposes. Termination: the agreement should specify a minimum term (if any), notice period to terminate, and — importantly — what happens to ongoing tenancies and any commission on tenancies introduced by the agent if the landlord terminates management and continues to let to a tenant the agent found (a common source of dispute is a 'renewal commission' clause surviving termination). When to use: whenever a landlord instructs an estate or letting agent to find a tenant and/or manage a residential letting on their behalf. Common pitfalls: instructing an agent without checking CMP and redress scheme membership; leaving the scope of 'management' undefined; failing to specify who registers the deposit; and overlooking renewal-commission clauses that continue to apply after the management agreement ends. This template is a drafting aid only and should be reviewed by a solicitor before use.

Information to customize

• Landlord's full name

• Landlord's address

• Letting agent's trading name

• Agent's address

• Agent's client money protection scheme

• Agent's redress scheme (e.g. The Property Ombudsman, PRS)

• Property address

• Service level

  Let-only (tenant find) or full management.

• Management fee (% of rent) or let-only fixed fee

• Is VAT included in the fee quoted?

• Who holds and registers the deposit — agent or landlord?

• Who arranges the gas safety check, EPC and electrical inspection?

• Minimum term of this agreement

• Notice period to terminate this agreement

• Date of this agreement

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Frequently asked questions

Do letting agents have to be licensed in England?

There is no general licensing regime, but since October 2019 agents handling client money must belong to a client money protection scheme, and must also belong to a government-approved redress scheme. A landlord should check both before instructing an agent.

What is the difference between let-only and full management?

Let-only (tenant find) covers marketing, referencing and setting up the tenancy, after which the landlord manages the property. Full management additionally covers rent collection, repairs, statutory compliance and end-of-tenancy handling.

Can the agent charge the tenant fees?

Very few. The Tenant Fees Act 2019 bans most letting fees charged to tenants (referencing, admin, inventory fees, etc.) — permitted charges are essentially limited to rent, a capped deposit, a capped holding deposit, and a small number of narrow exceptions.

Who registers the tenancy deposit?

Whichever party holds it — agent or landlord, as specified in this agreement — must register it with an approved tenancy deposit protection scheme (TDS, DPS or mydeposits) within 30 days and serve the prescribed information on the tenant.

Does commission survive if the landlord ends the agreement but keeps the tenant?

Often yes — many agreements include a clause preserving the agent's commission on tenancies they introduced, including renewals, even after the management agreement itself ends. This should be checked carefully before signing.

Who is responsible for gas safety and EPC compliance?

This should be stated explicitly in the agreement — either the agent or the landlord. Getting it wrong can invalidate a subsequent section 21 notice, since a landlord cannot serve a valid section 21 notice without having provided the tenant with the current gas safety certificate, EPC and How to Rent guide.

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