Recent concerns have emerged among landlords regarding unfair exit clauses being inserted into contracts by letting agents. These clauses may restrict landlords from terminating their agent’s services while tenants remain in the property, potentially limiting landlords’ control over their management arrangements. Understanding these contract terms is crucial for landlords to protect their interests and maintain flexibility in managing their properties.

Understanding the New Exit Clauses

A landlord recently shared their experience of receiving a letter from their letting agent stating that the terms and conditions (T&Cs) were being updated to “help landlords with new legislation.” Upon review, the landlord discovered that the exit clause had been altered to state: “The Landlord may terminate the Agent’s Service by providing the Agent with not less than 1 month’s written notice,” which initially appears reasonable.

However, the clause continues: “BUT termination will only take effect upon any Tenant or Occupant vacating the Property following expiry and/or earlier termination or surrender of the Tenancy.” In simpler terms, this means the landlord cannot end the agent’s contract while a tenant remains in the property, regardless of the landlord’s satisfaction with the agent’s service.

Implications for UK Landlords

This type of clause can significantly restrict a landlord’s ability to change agents or terminate a contract if they are unhappy with the service provided. It effectively ties the landlord to the agent until the tenancy ends or the tenant leaves, which may not align with landlords’ expectations or needs for flexibility.

For landlords, the ability to terminate a contract with reasonable notice is a fundamental right, particularly if the agent’s performance is unsatisfactory. Clauses that delay termination until tenant departure could lead to prolonged periods of poor management, potentially affecting rental income and property condition.

What Landlords Should Do

Landlords are advised to thoroughly review their contracts and terms and conditions with letting agents, paying particular attention to exit clauses. If a clause similar to the one described is present, landlords should seek clarification and consider negotiating its removal or amendment before agreeing to the updated terms.

In the example shared, the landlord requested the removal of the restrictive clause but found the agent unwilling to amend it. In such cases, landlords may wish to seek legal advice or consult with landlord associations to understand their rights and options.

Seeking Advice and Sharing Experiences

Landlords are encouraged to share their experiences with exit clauses and contract terms to build a collective understanding of common practices among letting agents. This can help identify unfair terms and support efforts to promote fairer contracts within the industry.

Engaging with landlord forums, associations, and legal advisors can provide valuable insights and guidance on how to handle restrictive contract clauses and protect landlord interests effectively.

Looking Ahead: Trusted Partners Hub

In response to challenges faced by landlords, the Tenant and Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This initiative will feature verified and approved service providers selected to support landlords, tenants, and property management businesses.

The Hub aims to offer landlords access to reliable legal, trades, insurance, financial, mortgage, tenant screening, and other services. Service providers interested in joining this network can register their interest at the TLA website.

By staying informed about contract terms and utilising trusted service providers, landlords can better safeguard their property management arrangements and ensure fair treatment in their dealings with letting agents.