Can I get out of paying a renewal fee to my agent?

by Readers Question

14:30 PM, 7th August 2013
About 5 years ago

Can I get out of paying a renewal fee to my agent?

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Can I get out of paying a renewal fee to my agent?

I let my flat through an agent in 2007 and signed a Letting Agreement with renewal fees. Can I get out of paying a renewal fee to my agent?

I pay the agent 6% each time he finds me a tenant and a yearly renewal fee.

He has found me three tenants since 2007 all have stayed about two years and I have paid the renewal fee but I have never signed another Letting Agreement with them.

Last year my present tenant renewed his contract on a roll-over basis at the same rent. I informed the agent this is what we had agreed and he has not charged me a renewal fee (yet).

The tenancy is due for renewal in a couple of months and he has ‘phoned today asking me if I would like him to write to the tenant. I told him I would deal with this.

The agent has nothing to do with the flat throughout the year, I collect the rent and the tenant calls me to deal with any problems. The agent has nothing to do – he did not even remind me about the gas certificate renewal – he has not even had to produce another contract.

I am going to suggest to my tenant that if he is staying we will continue with the roll-over contract at the same rent.

What is my position as far as the renewal fees are concerned?

I have a feeling he might sting me for two years at 6% at the next renewal.

I have spoken to several landlords that I have now met and they all use agents to find tenants only – no renewal fee.

I would be grateful for some advice please.

Many thanks

Nina



Comments

Mark Alexander

14:53 PM, 7th August 2013
About 5 years ago

Hi Nina

First, many thanks to you too for your kind donation to support the running of this forum, it is much appreciated 🙂

Your question is a very popular one and I will provide links to some related Q&A's and discussions which you may also wish to read.

The best read article we have ever published on this subject has been read by over 11,000 people - see >>> http://www.property118.com/cancel-letting-agents-contract-keep-tenant/30782/

In my mind their is no doubt that you are being ripped off. However, there's a difference between that and breaking the law.

The most talked about legal case of this nature was the OFT vs an agent called Foxtons. To summarise, the judge ruled the renewal fees referred to in the Foxtons contract were not enforceable as the terms were unclear to a consumer. Foxtons have since made their terms more clear and continue to charge what many believe to be exorbitant renewal fees. That said, they remain very successful. Make of that as you will.

The following link will take you to several articles regarding the Foxtons legal case >>> http://www.property118.com/?s=foxtons&submit=Search+Articles

These are a few things you need to consider:-

1) Read your contract. Is it clear on what basis what the fees are and when they fall due?
2) Are you a consumer? If so, you have a far better chance of legally challenging the enforceability of an unfair contract.
3) What are the costs of breaking the contract and is it in you interest to pay those costs?
4) What are the contractual ongoing responsibilities of the agent and has the agent performed these duties? If not then you may have a get out on the basis of breach of contract.

A common 'try on' if you need to is to threaten to report the agent to Trading Standards, The Property Ombudsman and any other professional bodies they may belong to. Agents don't want these bodies scrutinising them or knowing they have unhappy customers and generally try to come to an arrangement with you to prevent you escalating a complaint to that level even if they are technically doing nothing illegal. They will always know whether their fees are really justified in the back of their own minds.

Now I do want to rub salt into the wounds but do take a look at what's available elsewhere. Advertising, letting, tenant referencing and a rent guarantee insurance & legal fees protection package for a one off fee of just £97 + VAT. See >>> http://www.property118.com/find-me-a-tenant/

I wish you luck and please come back to us to let us know how things progress.
.

Nina

14:36 PM, 8th August 2013
About 5 years ago

Hi Mark

Thank you so much for your prompt response. I did know about the OFT -v- Foxtons case and have found your link very helpful and the comments by other landlords.

I have known my letting agent since 1997 when he sold my house and found me the flat I am now letting, so we do go back a long time and I have always found him very helpful but I have always dealt with everything concerning the flat. After talking to other landlords I do feel I am being ripped off by these renewal fees - especially when money is tight. I have never had a problem paying their fees for finding tenants and have to say he has always found me good tenants - but then I am a responsible landlord and as the flat was my home and I may even go back there one day, I want it taken care of!

Thank you again for your help and I will let you know the outcome.

Sincerely

Nina

andrew townshend

16:52 PM, 8th August 2013
About 5 years ago

when he finds you a new tenant he is entitled to his fee, but when the same tenant is simply staying on this does seem unreasonable, but if its in the agreement then i guess you have no choice but grin and bear it.

T J

16:39 PM, 10th August 2013
About 5 years ago

I suggest that when your current tenant leaves you write to your Agent and say their services are no longer required and ask them to confirm receipt of your letter. Then go to another Agent and negotiate a 'finders fee only' you do not need to sign ANY Agreement for that, just confirm in writing what you want them to do and the fee agreed. Alternatively, use one of the services Mark suggested to find a new tenant and have them referenced. I never sign Agent's Agreements and I would never deal with Foxtons, they are too aggressive and greedy. Read your current agreement again carefully and go to the Citizen's Advice Bureau for free legal advice on how to break the current agreement, or join the NLA for ongoing advice. Good luck!


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