Another question about Renewal Fees (sorry)

by Readers Question

11:00 AM, 3rd March 2013
About 7 years ago

Another question about Renewal Fees (sorry)

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Another question about Renewal Fees (sorry)

Readers QuestionsI enlisted an Estate Agency (one of the big expensive international ones) to help me find tenants for a property I have to rent out as I can’t afford to live there myself!

Initially I was looking to pay for a Management service, but they were too expensive, so I negotiated a drop in the fees(8% plus VAT now), and for the agreement to be just a letting agreement. I signed the terms and conditions, however realised I got nothing for this letting agreement, and every service was at an additional cost, ie preparation of the contract was £160 plus VAT, etc. so I crossed out some of these services, in fact all of them under the heading Letting Services, and told them I would do everything myself instead, including check in, collecting rent, registering the deposit under the TDS and preparing the inventory.

Subsequently, I said I just wanted to pay them for the fact they had found a tenant, and thought that was agreed, as I did and do all the things listed above.

It is 10 months later and I have heard from the agency that I will owe them renewal fees if I renew the tenants agreement or if it rolls onto a periodic.

I have argued I owe them nothing as the agreement was purely for finding the tenants, and for which I paid them upfront 10 months ago, the 8% plus Vat.

They not only deny that they ever agreed that my fee was a finders fee only, but that as I signed the terms and conditions, and crossed out some, that I knew full well that the renewal fees would be due.

I of course do not have anything in writing, re the finders fee, and they deny us agreeing this on the phone, and am being held to the terms and conditions. However, how relevant are these things:

  • the agent did not sign the terms and conditions themselves
  • the agent did not return to me a fully executed agreement between us, as per a clause in the Code of Conduct laid down by the TPO that the agent says they are bound by
  • there was no option to ‘buy’ my tenants from them
  • there was no clause to limit the renewal fees to just two renewals and given the fee is £3,024 per year this could mean a hideous amount of money if the tenants stay for years, as I hope they will. Surely the Foxtons ruling made this unfair?
  • I did not specifically agree to this renewal fee as per the TPO clause 3j in their Code of Conduct, which the agent say they are bound by
  • there was no ability to terminate this agreement unless I do not renew the agreement with my tenants (the tenancy agreement is between me and my tenants by the way)
  • the renewal fees were not actively flagged to me, but the agency says because I crossed out various things in the terms and conditions, and signed it, that I must have read them and agreed to them, which not only means, according to them that I specifically (see above ref to 3j of the code of practise) agreed to them, but also that I knew about them clearly.

I have tried to negotiate/discuss with them that this has come out of the blue, and that given I heard nothing from them, received no contract copy with their signature etc, that I assumed, after our discussions on the phone last year too, that indeed our business between them and me was concluded, but they are having none of it.

Have I got a case to proceed to court? I have so little spare money that I can’t afford a lawyer unless I have a strong enough case… And really don’t know!

Thank you

Sarah Peach



Comments

Industry Observer

13:12 PM, 3rd March 2013
About 7 years ago

This is an appalling case and if all that you say is true then I would suggest you have a very good case.

First I cannot see, to my surprise, that Hampton's are members of ARLA or anything else for that metter, at least not from their website. You will have a copy of their letterhead, what are they members of? Whatever it is you want to threaten them that you will complain to those bodies.

You should definitely complain to the TPO and drag up every single issue, no matter how minor, wehere they ahave not abided strictly by the TPO Code of Practice.

I would also emphasise to the TPO the appalling lack of communication from Hamptons - the TPO alweays comes dowen hard on poorly communicating agents.

The idea that you pay any sort of 'renewal' fee even if the tenancy simply goes periodic is lunacy and totally unenforceable. This is clear Foxton's territory - nothing happens when a tenancy goes periodic, it just happens. So how can there be a fee for it?

Now to practicalities.

It can be notoriously difficult to get out of Landlord contracts because this issue of fees being payable as long as any one of original occupiers installed by the agent or at any later date remains in occupancy. The only safe way to get rid of an agent is to give them notice at the same time that you give notice to the tenant.

I assume this was 1 one year agreement, should be longer judging by the fee, but if it is coming up for end of fixed term you may care to consider giving the tenant notice and telling Hamptons you are doing this, and therefore giving them the same notice.

Whether or not you then re-let to the same tenant yourself or through another agent is probably risky, but given that Hamptons are on wealk ground initially if it was me I'd probably do that.

One other point if you were not given a copy of the Landlord contract, which is what I assume you mean by Terms and Conditions, then they have no contract with you and for certain I would say no further fees can possibly be demanded of you by them. If they do kjust ask them to show you contractually a copy of a LL contract signed by you both that says such fees are payable

Mark Alexander

12:23 PM, 5th March 2013
About 7 years ago

Hi Sarah

Have the comments to date been helpful and answered your questions?

Sarah Peach

17:11 PM, 5th March 2013
About 7 years ago

Hi Industry observer, and Mark.

Thanks for yr encouragement. I have today finalised and sent my long email of complaint through the agents' internal complaints procedure, as directed to 'exhaust' by the TPO before making a complaint to them. I am perhaps naively hoping that a resolution can be made privately, as ideally I would like this agency to keep finding me tenants at the rate agreed, just not charge me indefinitely for doing nothing more than that, year on year if no new tenants are needed.

Can anyone answer my question as to whether on the facts above, I actually do have a binding contract with them in the first place?

Thanks

Sarah Peach

17:14 PM, 5th March 2013
About 7 years ago

Ps yes they are bound by TPO and ARLA etc and against else bodies' code of conducts, I have made my complaint. The status at present is that no fees allegedly become due according to them until May 2013, and I have not withheld fees yet. I will wait for the outcome of the complaint before I do or don't, I guess?

Don Holmes

21:08 PM, 6th March 2013
About 7 years ago

Point 1) I am an agent and I run a national (growing) franchise group.
2) I have experienced customers, we like to refer to our "customers"! as that and not clients as it has a different bearing!
3) I have had customers looking to change the service level agreed after we have done them a good job and secured a good long term tenant so we too have legal T's &C's.
But it seems you are being treated unfairly if all you say is correct?

So what I would suggest you do in the first place is recognise you have nothing to take them to court about really, in the second, You put all your objection in righting that you dispute the whole contract on the basis that neither party signed and agreed to any service level, although you have had some service to which you do not deny, but for which you have paid in full, I assume you have that receipt? if they insist on payment and you ignore them, which maybe you should not on the first reminder, but simply respond by referring them back to your last letter, perhaps adding "see you in court" After that ignore them and if they wish to do anything, they are the one's who will have to issue proceedings which will cost them and not you!! Your defence is clear without a full endorsed contract they have nothing.

I have had many dealings with CC and believe me they are very consumer friendly and I would suggest that any judge would turn his nose up on the basis of unfair terms of contract legislation, particularly in relation to ongoing fees and it seems your case has many issues with regard to unfair terms so in my view the agent here has no leg to stand on, incedently you can also write to the TPO out lining your complaints, that what he is there for. Good Luck

Sarah Peach

21:33 PM, 6th March 2013
About 7 years ago

Hi Don
Thank you for your comments. Yes, when I said do I have a case, I meant: "do I have a chance of defending successfully the position of not paying the renewal fees, when they say they become due, which is May this year", so, thank you for your take.

I'm still wondering if my signature alone binds me to something, but if it does, it does look like they're unfair terms.

I have offered to settle this dispute by making this agency my sole agency for finding tenants in the future if we can agree I don't want and don't pay renewal fees where tenants stay on further than the initial term. It's hopefully a reasonable compromise. I await their thoughts in 15 working days from yesterday.

Will keep you posted - thanks again.

In the meantime, if anyone's had any update with their agent on this renewal fee/no service but found tenants, recently, would be great to hear from you.

S

14:50 PM, 12th March 2013
About 7 years ago

Sadly the issue of letting agents charging unfair fees doesn’t seem to be a new one, no matter how big and reputable they might appear (in fact, sometimes the biggest players seem to get away with charging the most). There have been a number of reports into this issue recently, by groups such as Shelter, the OFT, Which? and the Advertising Standards Authority – hopefully these may go some way to bringing integrity to the sector so that this kind of thing doesn’t happen again. *MODERATED*


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