UK Landlord Forum / Life

Hello to all
I am after a bit of advice
I became an accidental landlord nearly a year ago,agent had got me a tenant in,paid all fees and I am self managing
Now the year is nearly up the tenant wants to stay but the agent wants another £800 off me for the next year as a fee?? I asked them what it was for as they have already done there work by finding me a tenant but he tells me that all agents charge this-(the only thing they do for me is collect the rent and then pay me-which they told me was a "free service")
I have read a lot on line re this charge and it seems that this is very slippery of the agent-This was never mentioned when I first let the property nor do I remember seeing it in the contract

Is there anything I can do? I don't really want to pay the £800,I told the agent that I will be renting the flat out for a good few years so every time a new tenant goes in they will get there fee's-which is fine-but paying them for doing nothing is a bitter pill to swallow

Any advice would be greatly appreciated
thank you

Hi jaybag,

The fee you're referring to is known as a "tenant renewal fee" - they are quite common. However, the agent lied when he said ALL agents charge that fee. I know many that don't, and I wouldn't use an agency that inflicts tenancy renewal fees because I think they're unfair. Having said that, £800 seems extremely excessive. I have NEVER heard agents charge that much, it's usually £100-£200 pound- that's to cover the cost of arranging new contracts (even that's expensive for copying pieces of paper, in my opinion).

If the tenancy renewal fee is NOT in a contract you signed or not stated clearly, then you don't need to pay it. There was case that went to court a few years ago, and the judge ruled that because the fee wasn't stated clearly, it wasn't enforceable. I will try and dig out the case.

Either way, I double check your contracts before you pay any fees!

Ahh here it, the case against Foxtons: http://news.bbc.co.uk/1/hi/business/8144161.stm

The judge ruled that the renewal fee needs to be clearly stated in the contract, otherwise it might not be enforceable.

Like I said, double check to see if you signed a contract that mentions anything about the fee

Hi propertyfag
thanks for replying
I have read about that case today on line,spent a bit time researching!
The fees we paid originally did amount to around £800 so that is why they want it again
I wouldn't have a problem paying £100 ish for the second year,and if a new tenant comes in then I will have to pay the fees again but I will not be paying the full amount,thats for sure
thanks for your help,I will dig out the contract when I get home tonight just to make sure,but I am certain I didnt come across it when I signed

cheers

what a bitch!

Whenever I ask agents now if there is a renewal fee, they always say there is a lot less enthusiastically than they were about selling the service, as though they would rather not admit it, just let you find it hidden somewhere in the small print.

If it is indeed in the contract, check whether it states anything about having to renew the contract. If you leave it running as a periodic tenancy, there will be no renewing a tenancy so hopefully no fees, but the agent wont like this.

Worst case, just say your not paying it and try and speak to the tenants if you can and maybe arrange an agreement with them which does not involve the agent.

Thanks Mr x
I was thinking about having a word with the  tenant anyway because they may have to pay a renewell  fee as well-(is that correct?)
so see if we can do a periodic tenancy month on month-think that would be best-will check contract tonight
thanks for the help

Mr-x raises a good point!

If you leave the tenancy to roll onto a periodic tenancy, then they usually can't enforce the fee because you're technically not "renewing" the tenancy, you're just allowing it to continue. Definitely the way forward to avoid the fee (assuming there is something in the contract)! I've avoided a tenancy renewal fee by doing that before!

That sounds like a stitch-up, and I would barter with them quite hard (having checked the contract).    

I can only remember ever having paid £100 - £150 or so for a renewal.  We manage our own properties, and have so far used estate agents for "introduction only".  Beyond that, we rarely involve them at all because we do not have to.

We provide our bank details to the tenants, who pay us directly each month.  Nothing goes via the agent beyond the first couple of months when fees are being taken.  Perhaps you could also come to that arrangement with your tenants.  Then there would be little excuse for any such excessive charge.

Just checked paperwork and there doesn't seem to be anything mentioned re renewell fees
Am waiting for a call from then,will take it up then.

Knew they were trying it on! Gonna get an earful me thinks!!

Thank for all your help

Good luck.

Let us know how you get on!!

Make sure you play hard-ball, because you can be sure the agent will!

Hello Jaybag,

Everyone here has given you sensible advice.  Put it together and you're got a great plan of attack against an utternly outrageous renewal fee.  I still haven't picked by jaw off the floor.

My only caveat would be around contacting the tenant directly and encouraging you to deal directly with each other.  The agent contracts I've read tend to include a clause about "client ownership".  It will say something to the effect of: If you freeze the agent out the the picture you owe them 3 / 6 / 9 months gross rent.  Dno;t fall into the trap of giving them all your income away!

Please let us know how you get on.

£800!  I've got to sign off now and try to find my dropped jawbone...

agree with you Jeremy,

I'm shocked, stunned..........................................but not a bit amazed!!

ciaraboo

Well what a shock!!
Estate agent boss hasn't got back to me
What an idiot,he either knows he hasn't got a leg to stand on or trying to rustle up
some sort of dodgy contract
I have until April to sort this so will which way it goes

Thanks for all the input and will kelp you posted

The few contracts I have says:

Renewal commission remains payable for however long the Landlord continues to collect rent from the tenant introduced by us.

Renewal commission fees remains payable whether under a new agreement or by the initial agreement being extended or the tenant being allowed to hold- over (all of these being 'Renewals' )

Renewal fees is liable to us as long as the tenant is liable to pay you rent. Therefore if the tenancy in respect of the property to the tenant is continued, extended or renewed whether in writing or verbally or by operation of law, we are entitle to a commission. This is in acknowledgement of the fact that we introduced the tenant to the tenancy agreement and had we not done so you would not be able to continue receiving rent.

These are 3 examples from different agents, it would seems rolling onto a periodic tenancy would not help under these unreasonable terms..any advise?

wow lucky, thanks for posting those clauses. Shows how sly agents are.

Out of interest, are these full management agreements? If so, did you pay anything extra for finding the tenant, (e.g. 1 months rent for finding tenant PLUS ongoing 15% monthly for management) or was it simply the full management fees you have been paying from day 1?

To me the way they have worded the clauses, they have obviously tried to cover their backs in the instance of you leaving it to go periodic.

How much are the renewal fees?

If it was me i just wouldn't pay and make it clear to them it's an unfair clause. If the tenancy remains periodic there is NO WORK WHATSOEVER done on their part so why should you be expected to pay. Even ask them what they would do extra for this fee. Don't take "its our policy/contract/any other bull****" for an answer. Also bring up the foxtons case if you need to.

I doubt they will try to enforce it, risking losing you as a client. (assuming it's full management)

Mr X, This was for a 'tenant intoductory fee' only, which is typically around 10% of annual rent with these high profile agents.
There's no management or any other service,have not received any nor do I require any.
They are asking for indefinite commission on a tenant they introduced, which is contrary to the judge's rule in foxtons case.
Foxtons now do let you leave after the 2nd renewal, which means after the 2nd year if you sign a typical 1 year tenancy with the tenant
In my case its the 3rd year of tenancy that the agent wants to charge next.
Maybe this is another case for the OFT!

Well,just had a chat with my tennant and she is happy to go on a periodic tenancy agreement once the first year is up.
Now,how would I go about this with the agent? She pays the agent every month and he pays me,this is a free service so I don't owe them anything for this. She is happy to pay me direct,so that is fine.
But what happens to the deposit that the agent arranged? Is this nothing to do with them?
And do I just let the agent know that is what we intend to do? And as this is a periodic tenancy now do I need to get the contract from the agent and just leave as is?(I can't find my copy for love nor money)
Any help and advice would be greatly appreciated
Thank you

I have had the occasional tenancy go onto a periodic (rolling month) tenancy after the initial term was up. 

I did it recently for a young man uncertain of the future of his job and facing possible redundancy.

I just let it happen and didn't pay the agent anything for that, though my tenants do pay me directly anyway.  It is assumed that the terms and conditions of the original tenancy remain otherwise unchanged. 

Quote from: Topseyt on January 31, 2012, 11:18:13 AM
I have had the occasional tenancy go onto a periodic (rolling month) tenancy after the initial term was up. 

I did it recently for a young man uncertain of the future of his job and facing possible redundancy.

I just let it happen and didn't pay the agent anything for that, though my tenants do pay me directly anyway.  It is assumed that the terms and conditions of the original tenancy remain otherwise unchanged.

So you think I should just change the agreement at the end of the year and leave as is,my tenant just pays me direct instead and not even speak to the agent about it?

I suppose it depends on your arrangement with the agent.  You need to speak to them about that, in case there is anything in your contract.  If you are self-managing the property then I can see no reason to have them involved, but you need to check it out.

Personally, I use agents for "introduction only", and beyond the first month or two whilst any fees are being taken, they are not involved at all in the rent collection.  The tenant has to have a standing order set up to pay straight into my account.  I am quite happy with it being that way.

I am self managing anyway and I guess I can get the tenant to pay straight into my account before the year is up thinking about it. I don't owe the agent anything
I will call them tomorrow and let them know what I intend to do
What then happens to the deposit then? Do i just get the paperwork from the agent and deal with that myself when the tenant decides to move out?

I deal with my tenants' deposits myself anyway, and lodge them with the Deposit Protection Service because it is free to use.

I have found that, around here at least, the agents often seem to use one of the other schemes, which charge an array of different fees.  I don't know whether or not agents are on some sort of commission deal with them, but I have only ever found one who used the DPS.

I am not sure you would need to move the deposit from one scheme to another.  If the agent used a fee paying scheme and not the DPS then you have already paid to protect it??  See what the agent says.

The deposit is with the DPS I believe so that wouldn't need moving
He still hasn't called me back,so I am just thinking,a month before the year is up(may) email them and let them know the tenant will be paying me direct,I cant really see them doing anything about it to be fair.I have checked my contract and T & C's and nothing about 2nd year fees in writing,so they can jog on if they think I am going to pay more-will keep you posted

Hi Jaybag,

Just to chip in...

Somewhere else on this site (can't find it now - damn!) is a story from a landlord who took over management from a useless agency.  Unbeknown to the Landlord: Upon losing control of the landlord relationship, the agent instructed the deposit holder company (who thought the agent was bona fide because it was them who set up the deposit) to return the deposit to the tenant.  Incompetance or revenge?  We don't know.

But the upshot was that one of the landlord's problems was that the tenant was living in the house with no deposit.

So learning from the woes of others: You may want to contact the DPS to ensure they don't take instructions from the agent over the deposit.  And give your agent some clear, written instructions you can use as a stick to beat them with if they get things wrong.

I have read that somewhere too.
Just had a quick rummage around paperwork and cannot find anything with regards to the Dps deposit for the flat I am letting out(only the place I am renting/living in) how stupid am I?? Didnt request it from agent as I didn't think I would be in this position!!
I am going to have to get in touch with agent and let them know my plans and request all info from them
Oh well,had to be done!! Will keep you all posted.
Again,thank you for your help

bastards! Got me by the short and curly's!
Found paperwork and tiny writing saying renewal fees which were not mentioned to me by the soppy bird at the agents that has now left!! My own fault for being naive I guess-a whopping 7%-which I will be paying 6 monthly!
But,my tenant called yesterday and said she may be moving out in May which means I wont have to pay any fees if she goes then!
Then I will be able to cut out the agent altogether and use some of the online agents that only charge around £300 all in and no renewal fees-very angry with myself but was the first time I had rented out a property so will have to put this down to experience and learn from it