11:00 AM, 1st October 2021, About A year ago 9
A recent Tribunal between estate agent Ludlow Thompson v Tenant has ruled that a charge of £393.54 to cover costs of changing the tenant was unreasonable. According to the Tenant Fees Act 2019 (TFA) a fee can be charged where a tenant wants to leave early and replace themselves with an alternative tenant. However, the fee chargeable is limited to be either £50 or “the reasonable costs of the person to whom the payment is to be made in respect of the variation, assignment or novation of the tenancy”.
David Smith, Partner at JMW Solicitors, says: “This will be a problem for many agents who charge their actual costs for these changes, which are usually over £50. The other problem will be for tenants. There is no obligation on a landlord to agree to a change of tenants and if agents are going to be limited to a fee of £50 they may look to recover the additional expense from landlords who may then simply refuse to agree to a change of tenants.
“I doubt that Ludlows will appeal, but I think they should. The Tribunal seems to me to be completely off base on this decision. This case will undoubtedly cause difficulties for agents until it is appealed to the Upper Tribunal and a binding decision is obtained.”