UK Landlord Forum / Life

Hello,

I have been letting with an agent for over a year and has signed up a renewal for another year.  I received following email from agent:

"You may be aware of the government's tenant fees ban which is effective from 1st June 2019 (Tenant Fees Act 2019).

The ban has unfortunately required letting agents to review their management fees across all service levels.
It is never an easy decision to make and whilst fees have remained static for some time now, a revision in fees has become necessary to continue providing the service to our clients.
The Agency has managed to absorb much of the loss in revenue from the new Tenant Fees Act but to advise that there will be an uplift of 2.2%+vat for the Managed service from June 2019 which equates to an increase of £27.72pcm"

I have went through my letting T&Cs and didn't find any clause about increased commissions. Moreover as I have just renewed tenancy next renewal will be April 2020 hence The Agency is not going to lose yearly renewal fee of £40.00 !!!! for all year but they want to start charging me ASAP! I know I can potentially not renew the contract making it "Periodic tenancy" hence The Agency would not lose any fees.

How fair is this and what can be done to avoid this unfair fee increase?

Regards, iliko

If the contract between you and the agent don't have a clause allowing them to uniliterally increase the commission they chrage you, simple, reply saying you don't agree to it and will stick with the existing contract you have with the agent thank you very much.

On the face of it,they should be tied into the original agreed fees until April 2020.They have clearly timed this to catch you after signing up.Would you be able to manage the property yourself in future,even if it means some penalties to be paid? I would dispute this at once. 

The question as to how fair it is is the interesting one to me... the Government has made it so that these fees - that obviously exist - cannot be paid by the Tenants.

They obviously used to be paid by the Tenants.

Now - because they still exist - and the idea of this as revenue (for some entity - Landlord or Agent, and further down the chain referencing companies) still exists (in that, because the Government banned them, the need for them to exist doesn't just evaporate) then the need for them to be paid (or absorbed by someone) still exists.

Now... the fees that we generally think of are the fees you would charge to a Tenant at the commencement of a Tenancy, fees for referencing and application and suchlike... your Agent isn't necessarily implying this is the case for you - as you have an existing tenancy and while there may be minor renewal fees, it's not the same wedge as at startup... so they're introducing a blanket increase, covering all of their Landlords at the same level (it seems) in an attempt to balance things out (for them).

So I would suggest you'll reconsider this in 2020, working with them, as you have just re-signed for another year and you don't consider it appropriate / fair to absorb this increase on their behalf. However, one should always be aware that a company may like to raise fees as time goes by... things like inflation and wage inflation do truly exist (although wage inflation for me is just a theory)... an organisation cannot introduce efficiencies infinitely to save costs.

Now... if you are set to be charged an additional £27.72 per calendar month by your Agent... I would ask them to introduce a rent increase of £30 per month on your Tenants (assuming they do all of the management for you)... unless you've already done it recently?

You are presented with choices. The Government has been unfair to you in banning Tenant Fees. The Agent has been unfair to you in raising the costs of their Services. Why would you balk at being unfair to the Tenants in raising the rent? Then the thing comes full circle and this Government policy will work as expected.

Tenants rejoice!

Quote from: Hippogriff on April 26, 2019, 08:26:20 AM
Now... if you are set to be charged an additional £27.72 per calendar month by your Agent... I would ask them to introduce a rent increase of £30 per month on your Tenants (assuming they do all of the management for you)... unless you've already done it recently?

Except that the OP have recently renewed, which I take it to mean they agreed a new fixed term with the tenant, so no rent increase during the period of that fixed term.

It can be done by agreement. Plenty is. ;-)