Periodic tenancy estate agents fees response?

by Readers Question

14:45 PM, 8th April 2021
About 2 weeks ago

Periodic tenancy estate agents fees response?

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Periodic tenancy estate agents fees response?

After several years of paying renewal fees, and with the agreement of the tenant, I notified the agent that at the end of the fixed period we would be going down the statutory periodic tenancy route. THEIR RESPONSE:

Terminate the contract following a successful letting of the property by us and the existing tenants remain in the property under either a statutory periodic tenancy or enters into a new fixed-term tenancy agreement directly with you, you agree to pay a fixed charge equivalent to one months’ rent + VAT (provided that we are not in breach of the contract).

This is ridiculous so am I to tell them to get the tenant out?
Any way around this as I’m loathed to pay them several thousand pounds for doing nothing and for a tenancy that could end at a months notice.

Jeevsie

Comments

DGM

23:13 PM, 8th April 2021
About A week ago

I can't see how they charge you fees for the AST rolling not a Periodic AST, unless you have to agreed to this in the contract.
I have a similar issue where the agent is trying to make me have a new AST, citing the Home Office say one is needed. The tenant was referenced by the Agent and passed (on a Tier 2 work Permit), the spouse has joined and would like to be put on the Periodic AST, is that allowed?

SimonR

9:37 AM, 9th April 2021
About A week ago

Reply to the comment left by DGM at 08/04/2021 - 23:13
Absolutely no need for a new AST, the spouse can be acknowledged as a permitted occupier and this can be done by way of an addendum/letter. The agent may charge and how much will depend on how good your negotiation skills are. As a point of note they are your tenants not the agents, the tenancy agreement is a contract between you and the tenant and if you give permission for the spouse to move in there is nothing the agent can do

Gary Nock

10:22 AM, 9th April 2021
About A week ago

Jeevsie it looks as if they have "stitched you up like a kipper" on their management terms and conditions. Never seen this before but it's done to keep their fee income flowing with the demise of tenant charges. Can't really see how you can get out of this. As a landlord you may not be covered by consumer law on unfair contracts dependent upon your level of exposure.

DGM

11:49 AM, 9th April 2021
About A week ago

Reply to the comment left by SimonR at 09/04/2021 - 09:37
Hi Simon R
Thanks for the reply, that is what I thought.
The wife passed the referencing on her own merit and is here on a Tier 2 working visa and qualifies for indefinite leave to remain in 2 years. The husband joined a few months later and has been living there (with my knowledge) on a dependent Tier 2 visa and they asked if he could go in the tenancy. I have no objection to this and the agent will charge them £50, not unreasonable.
The agent is trying to get me to renew the AST and then put him on that so they get £50 from them and £250 from me. I said I am not that price for a photocopy of the old contract, they have now reduced to £125 so I think the agent is just trying to get fees.
I did they can stay as long as they like, they are a nice couple, pay on time.

Gunga Din

11:57 AM, 9th April 2021
About A week ago

If I understand Jeevesie's post to mean that the agent is asking a months rent + vat to let you out of the contract, that doesn't seem too onerous. I'm not sure what the "thousand pounds for doing nothing" is though.

As mentioned, it depends what you signed up to originally.

Down the road, for various reasons, a contractual periodic is better than a statutory.

DGM

12:11 PM, 9th April 2021
About A week ago

A lesson to always make sure you read the small print of the contract. Agents will need to find ways to recoup the loss of not being able to charge both tenant and landlord anymore, some by dubious means - legally yes, morally questionable.
The agent I used for my property in my post will not use again, one I use in another area are great, family run letting agent and really helpful as they know I will use them time and again. They help me with maintenance in recommending contractors as I manage my own properties, always willing to help, unlike the other agent that are looking for short-term gain

David

16:07 PM, 9th April 2021
About A week ago

I assume they are quoting the contract you signed, but you should check this as they can't just make it up now.
Their response seems to think that you want to terminate the contract with them. If this is not the case you should clarify it as the clause they're quoting does not apply. You simply don't want them to issue a replacement tenancy.
If the tenancy goes statutory periodic, then they only have two tasks - to renew the deposit insurance if applicable and re-serve the deposit PI and secondly to re-serve 'How to Rent' if its changed since the start of the tenancy. It would be reasonable for them to charge for these services but nothing else. I think you should look up the Foxtons Case which I think may give you the scope to negotiate.

AP

7:53 AM, 10th April 2021
About A week ago

It depends on what terms and conditions you signed in the contract with your agent.

In my area it’s entirely normal for standard terms to allow for agents to receive a commission for however long the tenants stay in a property (whether on a fixed term AST or a periodic tenancy). They collect the rent to make sure they can do this. Some agents even charge the same rate at renewal (and won’t negotiate) others charge less for renewals and will negotiate it down and cap it at a few years (so I use those ones).

One other important thing to check is whether you are entitled for a refund of the fees paid pro rata should the tenants leave earlier than one year. Even if it’s not in the contract they should agree to this.


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