Can letting agent increase fees without agreement?

Can letting agent increase fees without agreement?

0:03 AM, 1st June 2023, About 11 months ago 5

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Hello, I have a property which is rented out via a letting agent with full management service. The current agreement was signed by both parties in 2018 with a monthly % management service fee and fixed costs for renewals there is no end date to the contract. The latest terms of business were requested in May and the agent sent a copy of the 2018 contract stating it as being current. I became aware the agency has recently been charging a higher % monthly fee plus a far higher renewal fee than stated in this ‘current’ contract. The manager claims they can do this owing to a clause in the terms of business: “If a tenancy agreement extends for more than 2 years, we reserve the right to increase the quoted fees.”

They sent a single email in November 2022 stating their intention to increase the monthly management fee but the sample contract attachment was totally unrelated to my property and fees different to those previously or currently being charged. This email was unread by me at the time and the agent confirmed there were no follow-up phone calls or emails to discuss the proposed fee increases. The manager claims that a new management contract is not necessary.

Can the agent charge whatever fees they wish just by sending a single email, without any discussion or negotiation with me?

Is it correct that a new agreement does not need to be drawn up and signed by both parties, purely because of a clause that states they reserve the right to increase fees?

Thank you,

J Anon

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9:01 AM, 1st June 2023, About 11 months ago

Have you increased your rents since 2018? Have resisted the agents proposed rent increases?

Agents like all of us are suffering a cost of living impact on their costs and unless their income increases e.g. by increasing rents as they're on a percentage then their profitability will be hit. Hence my initial questions. If there's been no rent increases (or only token increases) then this is probably why they are seeking a percentage increase.

Also lots of agents engage in the dubious practice of getting their "approved" contractors to pay them a back-hander and inflate the invoice that the Landlord has to pay. Some agents are demanding bigger kick-backs which is an underhand way of increasing their "management fee" without telling the Landlord.


10:09 AM, 1st June 2023, About 11 months ago

Agents fees are normally a % of rent charge so as Gromit pointed out if rent has increased so will your fees. Keep in mind that whilst none of us want increases you have chosen for this agent to manage for you and presumably have no problem with service provided. Maybe time to see if you can get a better offer....or terminate arrangement and manage the property yourself.

Graham Bowcock

10:09 AM, 1st June 2023, About 11 months ago

As with all contracts, it entirely depends what you signed up to.

An agenrt cannot unilaterally increase fees if the contract does not allow for it.

However, being practical, costs have been rising so agents need to recoup their costs. Thye should do this by negotiation.

I bought an agency where most of the fees were below what my own firm was charging and they were not particularly economical for us. I then agreed new (higher) fees with each landlord and set out new formal ToB with each one. Part of the deal was a certain level of service that we offered and more modern terms than our predecessor. We lost a couple of landlords and we let them go; that's fine we canot work for peanuts.

As for agents taking "kick backs" from contractors - there is a legal requirement for them to be declared to clients. There must be no hidden fees. We make nothing out of contractors, but do charge our landlords a clear fee for overseeing works.

Chris H

0:57 AM, 2nd June 2023, About 11 months ago

IMO, they can have a clause to increase, but it has to be formally delievered, in nearly all cases, notice by email is not accepted as legally served.

Also the fact they provided a document that did not have the correct information or even close will serve you in good stead.

I wonder how many months before you noticed? Nov 2022 was a good while ago, after a reasonable time period it would be deemed you have accepted the increase.. unless they only pay in 3 or 6 month periods and you are only now aware of the increase?

I am hoping by now you have served them a letter stating for fact that they have failed to legally notify you of the increase.

You can as mentioned above either agree a fair increase between parties or serve notice, for fairness it has been roughly 4 years and their terms are two years if no tenant change, bit weird imo, if as agencies normally charge for a renewal, periodic inspection and monthly fees.

I do not agree on tenancy renewals just so they can get paid ie stiff the LL, I prefer periodic tenancy, if they are charging % monthly they are getting paid for next to no work and of course the condition inspections where they charge the LL.

You do not mention but I would guess they also charged a finders fee or whatever posh name they give it?

I do not know who holds the cash, unless you are paid direct, but I doubt it as you mention it is a fully managed service, this leaves you in a weaker position per say, as you are the party that would have to either agree or take legal action if you cannot reach accord.

I hope you get this resolved in a fair way for all parties, please do keep us updated 😉

Martin Hicks

8:51 AM, 2nd June 2023, About 11 months ago

I have recently been contacted by the agents regarding an increase in the % fee charged. Their justification was that the many additional government-introduced compliance regulations has added to their workload. Listing EPC, EICR, regular visits to properties to confirm tenants are they say they are, have not changed to somebody else without notifying and are legitimately in the UK, etc. I have used the same agent since 1994, so can only agree with them that none of these requirements existed then. So I agreed to the increase.

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