Ongoing tenancy fee for renewal by management company

by Readers Question

18:56 PM, 6th April 2017
About 2 years ago

Ongoing tenancy fee for renewal by management company

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Ongoing tenancy fee for renewal by management company

I rent out two flats in Reading. In one case the freeholder’s agent (Simarc – mentioned elsewhere in your forums) asked me to register my tenant.

I duly did and paid the requested fee. I have now received a further charge for tenancy renewal despite the fact that my tenant is staying on and has a new one year lease.

They claim that the lease allows them to levy an administration charge for every tenancy registration, regardless of whether it is new or on-going. I asked them to let me have the relevant pages in the lease.

They have referred me to a page in the lease which is total legalese and, I suspect, open to interpretation.

Can I refuse to pay as the repeat fee seems an unreasonable demand as well as the amount at over £100 a time?

Ashley



Comments

Neil Patterson

18:58 PM, 6th April 2017
About 2 years ago

Hi Ashley,

It is impossible to say how water tight the contract is.

However, the consequences of defaulting on your lease can be severe and you need to consider the cost of fighting it.

Puzzler

23:07 PM, 6th April 2017
About 2 years ago

The way round it is to have the tenant go onto a statutory periodic tenancy at the end of the fixed term. I have never understood the necessity to renew one other than to line the pockets of letting agents.

terry sullivan

8:35 AM, 7th April 2017
About 2 years ago

say no--quote unfair contract terms--i am a freeholder and i charge no fees to tenancies--only to lessees

Gary Nock

8:54 AM, 7th April 2017
About 2 years ago

Puzzler is correct in that a statutory periodic stops this. Simarc are notorious for trying to screw leaseholders for every penny. Elsewhere on the forum, and without repeating myself, the fee is classed as an administration charge. It is subject to certain rules before it is legal. Service of a Summary of Rights and Responsibilities in no less than 10 font. Incorrect service of notice means the charge is not legal. Simarc send the Notice out in 6 font to save paper. Check out the leasehold advisory service advice on this. And the only way Simarc know if your tenant has signed a new tenancy is if you tell them. So don't tell them.

Laura Delow

8:57 AM, 7th April 2017
About 2 years ago

You don't say what the clause in the lease in legalese speak says. You do need to understand what this exactly states. Normally if a lease states a fee is payable to the freeholder for subletting, it usually is annual in nature even if your tenant is on a periodical but it would need to state this is annual. It may only be due if the sublet is longer than 12 months (which a 12 month AST isn't even if a periodical). It may state a fixed fee amount is due with no reference to increases to accommodate inflation. You do need to understand exactly what this legalese.

Nash HARJI

11:46 AM, 7th April 2017
About 2 years ago

Sadly this is more common than suggested above. I've had to put up with this for several years now. In a couple of instances I've actually sold the properties to get away from over zealous/greedy management companies. Unfortunately if it is in the lease there is nothing you can do about it except avoid them and go for freehold properties only. You will save thousands of pounds on service charges as well. Let first time buyers have the leasehold properties and see how they like the true cost of owning property nowadays.

Charles de Lastic

13:14 PM, 7th April 2017
About 2 years ago

This whole thing is a RIP off !!!!

We had exactly the same problem with Simarc and hazelvine for a number of properties and fought it for over 3 years flatly refusing the pay the fees. In the end they backed down when we said we were happy to go to court.

Basically. they are due an administration fee to register when the tenant changes (this is in our leasehold contracts) but this is only a simple matter of recording it in a book or other record.. we reduced their fee to £50+vat register the change in tenant as and when it happens. Once a tenancy goes from 6 months onto a periodic on going tenancy which we always make sure is part of the original tenancy agreement. Therefore, we only pay them when the tenant actually changes and made them go backwards and wipe all out the charges they had placed against our flats.

Simply put, my opinion is that the whole thing is a rip off by Simarc and other similar large management agents (like Hazelvine) for the freeholders as most landlords will not bother to fight them. So as most Landlords cannot be bothered or get frighted off by the letters from a solicitor they back down. As a result as Simarc manage thousands of flats they make several thousands a year from ripping off landlords so it is worth their while.

They are not prepared to go to court as if they lose - which they would - it would cost them thousands a year if a precedent is set- so better to just settle with Landlords who put up a fight as the vast majority dont.

If you want to call me on 07773 429030 I can send you all the correspondence by email we had so you can see how we won in the end.

Nash HARJI

13:42 PM, 7th April 2017
About 2 years ago

I had problems with Hazelvine when I was selling up. They refused to confirm that there were no outstanding charges until I paid these, which they had back dated it to when I first started letting. I was getting a good price for my flat so the several hundred pounds did not justify my delaying matters but had I not been selling I would have happily taken them to court. In a few cases management companies have won the right in court to charge a reasonable amount as this was specifically stated in the lease. It does however make you wonder how them knowing the actual individual tenant occupying the property at any one time makes it more secure for the freeholder.

Ashley de Safrin

18:41 PM, 7th April 2017
About 2 years ago

Reply to the comment left by "Charles de Lastic" at "07/04/2017 - 13:14":

Thank you Charles. Your comments are particularly apposite and echo my problems with Simarc. I would be grateful if you could e-mail me the relevant correspondence and then I can call you on any particular questions that the correspondence brings out.

I look forward to hearing from you.
Ashley

Charles de Lastic

9:40 AM, 10th April 2017
About 2 years ago

Reply to the comment left by "Ashley de Safrin" at "07/04/2017 - 18:41":

Hi Ashley
Sorry but I cannot see how to email you directly as i do not have your email and it is not posted on a members profile as far as I am aware - so please call me with your email address and I will send you the info.


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