Is it possible to avoid Letting Agent renewal fee in case of self-management?

by Readers Question

16:03 PM, 1st June 2017
About 2 years ago

Is it possible to avoid Letting Agent renewal fee in case of self-management?

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Is it possible to avoid Letting Agent renewal fee in case of self-management?

I self-manage a property in London and I used a letting agency to find my tenant. My contract with the letting agent states there is a fee to be paid for tenancy renewal (5% +VAT, periodic basis included). The tenant has contacted me well in advance of the expiration of the current tenancy term requesting to renew.

If I draft a new Tenancy Agreement can I avoid paying the letting agent’s renewal fees? Would it be likely they would actually take me to court?

Many thanks

James



Comments

Neil Patterson

16:05 PM, 1st June 2017
About 2 years ago

Hi James,

This question crops up a lot, but generally (contract dependent) the only way you do not owe a renewal fee to the agent is if you change the tenant.

However, you may want to try to negotiate a financial settlement that you and the agent are both happy with to buy yourself out of the contract.

terry sullivan

8:48 AM, 2nd June 2017
About 2 years ago

unfair contract term?

Martin Roberts

9:09 AM, 2nd June 2017
About 2 years ago

Its impossible to say wether they will take you to court, they might.

If you have a good tennant it might be worth paying this to keep them, and read any future contracts before you sign to make certain you are happy with all the details.

Ian Narbeth

9:54 AM, 2nd June 2017
About 2 years ago

Reply to the comment left by "Martin Roberts" at "02/06/2017 - 09:09":

James
You should assume they will take you to court and that they will win. They will soon find out that the tenant has not left and will claim their commission. Even if they do not immediately find out they have six years to bring a claim. You have signed a contract. Abide by it.

And no the renewal fee is not an unfair contract term as far as the law is concerned. 5% is actually quite low. Some agencies want a full 10%.

Puzzler

10:14 AM, 2nd June 2017
About 2 years ago

6% including VAT - on £1000 rent that is only £60, pay it

Michael Barnes

3:28 AM, 9th June 2017
About 2 years ago

But is a statutory periodic tenancy a renewal or a statutory right?

Ian Narbeth

8:50 AM, 9th June 2017
About 2 years ago

Reply to the comment left by "Michael Barnes" at "09/06/2017 - 03:28":

Hi Mike
That's not really the point. The agent's commission depends on the contract with the landlord. If the contract provides for a further commission if the tenant stays on, then it becomes payable. In practice, agents try to insist on new tenancies being signed.

I assume the Election coverage got too much for you at 3.28 in the morning! 😉

Michael Barnes

15:21 PM, 9th June 2017
About 2 years ago

Reply to the comment left by "Ian Narbeth" at "09/06/2017 - 08:50":

I was basing my comment on what I assumed was an extract from the contract where the OP wrote "there is a fee to be paid for tenancy renewal ".

I thought it was going to be a far more exciting reality show!


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