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Early end of fixed term tenancy.... reasonable charges?

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« on: April 21, 2021, 02:39:07 AM »

I am currently just over half way through a 12 month fixed term tenancy agreement (£1250 a month rent) which finishes at the end of September this year. Due to unforeseen circumstances surrounding my 90 year old father, I contacted the landlord asking if I could come to a financial agreement with him that would allow me to end the tenancy earlier than the agreed term, so that I could move in with and care for my dad. I advised that while I hoped to move out within the next few weeks, that the rent would be paid for up to the end of May, so the fixed term tenancy would end four months early.

The landlord advised me that the letting agent would contact me, and they wrote explaining the terms of how I could end the tenancy early.

They outlined that the landlord should not be at a loss but also, he should not gain from it, and that despite my request for the last day of tenancy to be the end of May, that I would only be allowed to leave once a new tenant was in place and ready to move in.

They advised that I would be fully liable to mitigate the landlordís contractual loss which would include (but not limited to) the following:

1) Letting Fee, based on a pro rata basis, where the letting fee the landlord was charged for my tenancy would be divided by 365 days, and this would be multiplied by the balance of the number of days to the end of the fixed term from the date of my early surrender.

2) A surrender deed, costing £360

3) Letting agent admin and negotiation to deal with the early termination, charged at £90 an hour, total 5 hours £450.

4) Legislative testing costs which the landlord initially paid for with my tenancy, again charged on a pro rata basis, divided by 365, and then multiplied by the balance of days left from when I leave to the end of the fixed term.

5) Inventory check out costs, again divided by 365, and multiplied by the balance of the number of days to the end of the fixed term.

6) Tenancy referencing and set up fees, the landlord will need to cover these costs for the next tenants, and as such I will be liable for the pro rata costs that they incur for this.

I inquired with the letting agent as to the possible total charges I'd be liable for, if a new tenant was found by the end of May. I was trying to gauge the total highest costs I'd pay, as any date after that would mean less overall costs in relation to the above outlined pro rata items. They replied they could not tell me, as they did not know what the rental and referencing amount etc would be for a new tenant and without that knowledge they could not work out the pro-rata costs that i'd be responsible for.

I would have much preferred to have come to a direct agreement with the landlord, rather than have the letting agent involved who to me seem to be asking an excessive amount for their admin (£90 an hour/ £450 total) Also is a surrender deed (£360) normal in these situations?

Just wanting to inquire if the outlined costs seems reasonable and fair, and are normal in such situations for early termination of fixed tenancy, or should I try to come to some other arrangement? Are there any outlined points from the letting agent that I could contest?



 

   
« Last Edit: April 21, 2021, 04:50:07 AM by Oliverobby »
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« Reply #1 on: April 21, 2021, 08:48:21 AM »

 :-X
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No, but the landlord is not obliged to offer surrender, so you're in a difficult position.
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« Reply #2 on: April 21, 2021, 09:59:32 AM »

It looks like they're trying to not break any laws, by doing this pro rata thing... but, as said, the Landlord could just try to insist you pay all the rent (and associated costs like Council Tax) for the full fixed term. This 'offer' is not a gift-horse... but when an Agent is involved if they know what they can get away with then they'll get away with it... they want their pound of flesh too... if you had a direct relationship with the Landlord I get the feeling things may go better... but the Agent is in the way (as it should be for this setup, that's why the Landlord employed them, I guess).

4 and 5 look strange. Is it worth getting more detail on that angle? 4 seems a choice, rather than a necessity, and 5 should be a static cost, surely?
« Last Edit: April 21, 2021, 10:26:19 AM by Hippogriff »
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« Reply #3 on: April 21, 2021, 01:39:55 PM »

Thank you for your replies. Having never had to deal with this type of situation I was unsure if what was being proposed was the "norm", so thank you for the clarification. While the letting agent is saying that the landlord should not financially gain from an early surrender, theyíre quite happy to profit from the situation.

In regards to points 4 and 5, itís my understanding that point 4 is for the gas and electrical safety check which the landlord paid for at the start of my tenancy. Theyíre saying that he would again have to do these checks at the start of a new tenancy, but as Iím looking for early surrender, heís at a loss for the checks he carried out for myself and therefore needs to be compensated for this on a pro rata basis.

Point 5 the agent is saying that in normal circumstance the inventory check out cost would have been paid by the landlord, but with an early surrender of tenancy again I will be required to pay the pro rata element of this report.

Point 6 seems strange to me. The landlord would need to cover the costs for a new tenant if I left at the end of contract, so unsure why I'd be liable on a pro rata basis for early termination.

In the email the letting agent did include an example amount for a fictitious early surrender and that amounted to nearly £1900, so I take this as being an indication of the potential costs involved. As I say I did try to get more information in regards to the costs that would only lessen from a potential early surrender of the end of May, but was only met with obstruction from the letting agent.

Is it possible for me to come to a direct agreement with the landlord, and totally do away with the agent and the surrender deed and admin £450 charges etc? What would be a good offer to try?

I doubt its relevant but just mentioning this in case it may give me some leverage is the flat comes with a garage, for which I was never given a key for so have been unable to use the whole time. I was given a bunch of keys at the start of tenancy, but none of them fitted the lock, and me wanting a quiet life I just let it go. Can I request some rent rebate for this? Even if I didn't mention it, should not the landlord or letting agent have made sure that all amenities with the property were in order before the start of my tenancy?
« Last Edit: April 21, 2021, 01:47:57 PM by Oliverobby »
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« Reply #4 on: April 21, 2021, 02:06:11 PM »

I would advise you not to contact the landlord directly. He hires the agent to deal with everything for him.
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« Reply #5 on: April 21, 2021, 02:08:40 PM »

GSC is valid for a year and doesn't need re-doing on change of Tenant.

EICR is valid for 5 years and doesn't need re-doing on change of Tenant... some Landlords think it's wise to do so, others do not, some have been conned (by Electricians and Agents) into thinking it is necessary to re-do it.

From .gov.uk re. EICR...

1. Obtain a report from the person conducting the inspection and test which gives the results and sets a date for the next inspection and test.
2. Supply a copy of this report to the existing tenant within 28 days of the inspection and test.
3. Supply a copy of this report to a new tenant before they occupy the premises.

So, if the Landlord wants a new EICR it is actually a choice.
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« Reply #6 on: April 21, 2021, 02:15:09 PM »

In the email the letting agent did include an example amount for a fictitious early surrender and that amounted to nearly £1900, so I take this as being an indication of the potential costs involved. As I say I did try to get more information in regards to the costs that would only lessen from a potential early surrender of the end of May, but was only met with obstruction from the letting agent.

You have to understand their motivations... you're just someone to bilk for money, right? You're low-hanging fruit. An easy mark. They've no desire to help you. They've no interest in helping you. Expect them to do everything they can to milk you dry and obstruct you. Any other expectation is a flight of fancy. All you can hit them with is legalise... not common sense, I'm afraid, or a sob-story (no implication yours is)... and try to get them to accept some of the proposed charges might be unfair... but I will re-stress this...

You both signed-up for a fixed term in good faith... you are the one wanting to break the agreement... the Landlord could effectively refuse that path... and you have to understand that you're the one who is rocking the boat, not the Landlord. If the Landlord had a family situation and ended up wanting to move back in (as some do) and wanted to turf you out half way through your fixed term... you'd be very upset. It only takes so much of a Tenant, who wants to leave, battling against proposed charges for someone to decide it's not worth it... yeah? Be careful in your dealings.
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« Reply #7 on: April 21, 2021, 02:17:46 PM »

EICR is valid for 5 years and doesn't need re-doing on change of Tenant... some Landlords think it's wise to do so, others do not, some have been conned (by Electricians and Agents) into thinking it is necessary to re-do it.

I do not. The EICRs I have will be the only ones done until the date... if a Tenant moves on in the meantime I will do the same kind of visual and socket-tester checks that I used to do before EICRs became mandatory.
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« Reply #8 on: April 21, 2021, 02:35:46 PM »

Firstly,you were not doing the landlord any favours by offering to pay until the end of May. As said, you are the one breaking the deal.That said, some of the charges mentioned by the agents are outrageous.It is a hard one to advise on,because the landlord can just say the place remains empty and you carry on paying until the contract ends.He does not have to release you.
In your case I would write to the landlord and copy in the agent.Say you fully understand the landlord should not be out of pocket,but you have taken advice regarding the fees being asked for by the agents,and feel they are unjustified. I would expect you to pay the rent up until the time a new tenant takes over,plus council tax. I would also expect  you to pay for the proportion of the reletting fees incurred by your landlord.There is no reason to have further safety checks done.
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« Reply #9 on: April 22, 2021, 12:52:14 PM »

Thank you for all the advice and itís certainly a tricky situation. As pointed out there are some unjustifiable charges being mentioned by the letting agent ie gas, electric cert, and also the surrender deed and £450 for admin.

I think Iíll email the landlord, politely explaining that most of the letting agents charges are unjustified, and that in this situation I fully agree that he is not left out of pocket, and to proportionally cover his reletting feeís for the period from when a new tenant is found and moved in until the end of my fixed term, and of course pay the rent and council tax up until that time. Also to allow as much flexibility and access for any viewings, and to ensure the flat is well presented for these times.

Could it be seen as a benefit to the landlord that with a potentially longer time frame for viewings, and with a more or less instant change of tenant from myself to a new one, this would ensure no void period in his rental income, which could be a possibility if I were to stay until the end of the fixed term, giving the standard one months notice to vacate and allow for viewings?

I do know that before I moved in here end of September last year, that the flat had been on the market and empty from March, so six months. That could have been due to market conditions at that time, but to me that seems a long time to have been on the market with no rental income for the landlord.
« Last Edit: April 22, 2021, 01:25:44 PM by Oliverobby »
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« Reply #10 on: April 22, 2021, 02:05:16 PM »

I think your place could be relet much more quickly now,as we get out of lockdown.As long as the landlord is not out of pocket he will probably be reasonable,if you explain your dilemma,and are suitably contrite. 
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« Reply #11 on: April 22, 2021, 02:36:55 PM »

As long as the landlord is not out of pocket he will probably be reasonable,if you explain your dilemma,and are suitably contrite.

Noted. Apart from paying the rent and council tax up until a surrender date, is covering the proportion of the landlords reletting fees enough to ensure he is not left out of pocket? Is there anything else that needs to be considered?
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« Reply #12 on: April 22, 2021, 02:57:38 PM »

I have never expected more than this if tenants leave early.I hope the landlord is less greedy than his agents.
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« Reply #13 on: April 28, 2021, 01:01:45 PM »

I emailed the landlord and from the points raised here, I politely  explained that some of the suggested charges and fees were a little unjust. He replied that there would be no need for the legislative testing or check out fees. But he would still require a surrender deed. As for the agents £90 an hour fee, I should contact them to discuss, but if I have a cheaper option for this he would be happy to use this service.

What exactly is a surrender deed and can I use a different service apart from the agent for this?

I've again looked at the agents email, and have now noted apart that from the earlier outlined 6 points, they gave an example which includes extra items to those.
 
In their example, based on a £1250 month rent, with 183 days early surrender they list:
1) Pro rata letting fee £721
2) Management Fee based on 90-day notice £177
3) Administration on Existing Tenancy Set Up £58
4) Surrender Deed £360 
5) Inventory Check out Cost, £58
6) New inventory Cost, £65
7) New Gas Test, £42
8 ) Legionella Risk Assessment, £58
9) Legal insurance, £56
10) New Tenants Right to Rent Check, £18
11) New Tenants References, £36
12) New Tenancy Administration £118
13) admin £450

Total £1857 for 183 days early surrender.

Have no idea what some of these are, but I'm now trying to find out which the landlord requires.
« Last Edit: April 28, 2021, 01:19:27 PM by Oliverobby »
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« Reply #14 on: April 28, 2021, 01:26:21 PM »

What the Agent is doing here... I think... in these changing times of Tenant Fees being banned... is taking advantage of the law that states, although Tenant Fees are now banned, it's reasonable to charge reasonable amounts for certain things... all of these costs are reasonable... in a sense, by that I mean - they're modest individually... but soon mount up to a total that can seem a little eye-watering. However, £1,857 (only an example, I realise) is still way better than many (6?) months of rent.

A Surrender Deed is a Deed of Surrender or Surrender... and is an agreement between Tenant and Landlord that the tenancy can end. Is it needed? I've been doing this for quite a long time and I like to think I do things by the book. I've never used one.
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« Reply #15 on: April 28, 2021, 02:43:26 PM »

It's not obviously disallowed under the Tenant Fees Act 2019, but if challenged legally, I would argue that some of these doesn't count as "loss suffered by the landlord as a result of the termination" or "the reasonable costs of the letting agent in respect of the termination".

A pro-rata payment of the cost to the landlord in setting up the current tenancy by arguing that those cost was incurred on the basis that they'll get 12 months rent from the resulting tenancy, maybe okay. But the cost that will be incurred in obtaining a new tenant is not a loss from the termination of this tenancy. Those cost would had been incurred anyway if this tenancy ends by effluxion of time, it's just happening a few months earlier. In terms of any letting agent management fees etc. that's paid by the landlord to the letting agent, there's no loss to the landlord if it wasn't prepaid for 12 months at the start. If the liability only arise when the letting agent collect the monthly rent, then any arguable loss is suffered by the letting agent not the landlord. There's no "loss suffered by the letting agent" allowed under the Tenant Fees Act.

Another way of looking at this, if the landlord are able to find a new tenant, the loss to the landlord are only any rent due during any void period between the tenancies, and EITHER the pro-rata cost to setting up original tenancy OR the pro-rata cost of setting up the new tenancy. Charging for both is attempting to get paid fees that have been disallowed under the Tenant Fees Act.

But like I said before, the landlord is not obliged to agree at all so in practice............
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« Reply #16 on: April 28, 2021, 03:27:39 PM »

The OP shouldn't forget, too, that them relinquishing the property also carries other savings... a property being let at £1,250 per month must be (I don't know London prices) something like Band D Council Tax. That's saved for 6 months. It's not going to be palatable being hit with a bill for many hundreds of £s for something you're not using... but dealing with this in a very black-and-white manner can be helpful. Even more so if there's simply no choice for the Tenant, it seems they must go due to family reasons. I don't think the OP expected to be able to leave without charge... if there's a fight to be had, pick on the easy ones, like you've already benefited, somewhat, from listening to certain stuff here... maybe press on a few more buttons, pull a few levers... try to bring it down, but remember that even though the Landlord may be reasonable... the Agent isn't going to be likely to just roll over when you're on the ropes. Unless they're proper cowboys they must believe they have a realistic chance of getting these items paid by you, and that's likely from experience.

I haven't yet got my head completely around what is example and what is a real bill... I wonder if the OP definitely has the real proposed amount, itemised?
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« Reply #17 on: April 30, 2021, 03:41:16 AM »

Very grateful for all the advice I have been given here, and I now have more details from the landlord. He has said for early surrender he'd only need the pro rata letting fee for the cost in setting up the tenancy, the surrender deed and the agents administration and negotiation fee for work on the surrender (£90 an hour) He does not require any of the other items that the letting agent listed. Looking again at the agents email the surrender deed and their admin were defined in the contract that the landlord signed with agency prior to my tenancy commencement.

They say the surrender deed is £360. Is it possible to have this deed from elsewhere, without the letting agent's involvement? ie possible lower cost?

Can the letting agent insist that the other items are also covered, even if the landlord has said to me he does not need them?

I'd be looking to have the flat in order, and able to be marketed by end of next week, and if a new tenant is found quickly, then possibly end of May they'd be able to move in. This would be four months early surrender, so approx £500 pro rata letting fee, £360 for the deed and however many hours x £90 for the agents work on this matter. As they now only have to work on the surrender deed, instead of all their previous other listed items, I'm hoping that won't come to many hours of work?
« Last Edit: April 30, 2021, 04:44:03 AM by Oliverobby »
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« Reply #18 on: April 30, 2021, 08:35:02 AM »

Can the letting agent insist that the other items are also covered, even if the landlord has said to me he does not need them?

No, an Agent cannot insist a Landlord does anything, not really... the business relationship there goes the other way around - the Agent works for the Landlord. The Agent should take instruction from the Landlord. However, think about your situation... the Landlord has obviously employed an Agent to remove themselves from the nitty-gritty of being a Landlord, or because they're not confident in their role. They're taking advice from the Agent, and rightly so.

The Agent, on the other hand, should be expected (yes) to cream as much money from you as possible... why they'd want to let you use your own Deed of Surrender you created in Word or downloaded from freedocs.com (I made that up) is beyond me, especially if they can charge you for one that they'd edit in Word and hit "Print" on... plus the admin. side of it, witnessing etc.. You might get somewhere, but realise that neither of these parties has in their own interests your interests. You are leaving the business relationship with them... never to be heard from again... you're depending on their innate sense of fair play (which may not even exist).

I think I hinted at it before... but there's an obvious risk here that you push and push and push and someone in the Agency just turns to the Landlord and says - "you realise, right, that you can just enforce the fixed term here and get him to pay rent until the end?" - and the Landlord might think - "ah, crap, this fella is way too much trouble"... so pick your battles and have realistic expectations. Good luck.
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« Reply #19 on: April 30, 2021, 08:37:23 AM »

£90 to change some names, an address and some dates on one of their document assets... hit print (put paper in the printer if needed)... sign it / witness it (possibly even all done electronically these days - so no paper needed!)... hard to see it being more than that £90 if you've pared their actions down to the bare minimum already.
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« Reply #20 on: April 30, 2021, 10:13:23 AM »

Preparation of a deed of surrender is classed as reserved instrument activities under the Legal Services Act 2007, which mean the agent couldn't prepare it themselves, they would have to pay a lawyer (/conveyancer etc.) to do so. So £360 isn't actually that much if it's on spec. They probably do have one they have used before, but I can see the argument for the cost. Basically, the more special unique to your situation terms you want, the more likely it would be going before a lawyer for review, the more you'll be paying for.
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