Renewal Fee after 3 years?

by Readers Question

9:20 AM, 15th June 2020
About 6 months ago

Renewal Fee after 3 years?

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Renewal Fee after 3 years?

I signed a Terms of Business contract with a letting agent in 2014 for let only on an assured shorthold tenancy agreement for 3 years. At the end of the term my tenants and I wished to renew. The agency demanded 3 years at a negotiated 5% + tax and admin fees plus a tenancy renewal fee. The agency contacted me regarding the renewal due in July this year, again asking for 5% etc etc.

After looking again at the original terms I signed – 9.1. The Commission payable for our Let Only Service is 10% plus VAT of the total rent, premium or other monies payable by the Tenant during the initial Tenancy.
9.2. If a Let Only Tenancy continues as a renewal of the fixed term or as a periodic tenancy then our Commission is reduced to 7% plus VAT of the total Rent, premium or other monies for the Letting Service whether or not we are instructed to act on your behalf for the period noted at clause 12 below.

There are many points before clause 12 which keep reiterating commission being payable whether or not they are involved, but looking closely at clause 12 –

BASE COMMISSION
You will have to pay us a Commission at the Let Only Commission Percentage of the gross Rent, premium or other money payable throughout the initial fixed Term.
After the initial fixed term we will charge Renewal Commission if the Tenancy is renewed whether or not we are instructed to act for the Landlord if the Tenant remains in occupation for a period of 2 years.

It seems to me their demand for money after the 2 year renewal period is unlawful and dishonest. I have requested the sum for the 5th year to be returned which they responded –

“To explain our terms did change on renewal fees which are now applicable to all Landlords the whole way through a tenancy irrespective of the original terms. As a gesture of good will and given your previous terms I had agreed from here on not to charge fees when this should now be applicable.”

My terms were never previous, these are the terms. I have again asked for the 1 years fee to be returned but they have not replied.

The amount is 3.25k.

At this point should I engage a lawyer?

Paula


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Comments

Badger

12:18 PM, 30th June 2020
About 5 months ago

Reply to the comment left by DALE ROBERTS at 15/06/2020 - 16:05
For some reason it can be an extraordinarily difficult enterprise to get certain letting agents to understand and recognise the importance of 'contractual' v. 'statutory'.

I have had to move agents on more than one occasion because of their boneheaded refusal to see sense on this point.

On one occasion I pursued the matter through three levels of management (with another three still to go before getting to the board!) before I finally said to them - "you know what, you are clearly just too damned stupid to understand. Accordingly, I will no longer be doing business with you from now on."

The final straw with this large national chain was when their legal department came back with utter rubbish re the point at issue.

I appointed a new agent to take over the tenancies mid-term having carefully confirmed the wording of their standard AST first. (Saved myself a bunch of money in agent fees as well into the bargain, so well worth it.)

Paul Shears

13:00 PM, 30th June 2020
About 5 months ago

Reply to the comment left by neilt at 15/06/2020 - 17:14I have a very healthy paranoia regarding the conduct of all large organisations and experience has shown that I should have included smaller ones as well.
I had one agent from a well known national chain, email the terms of engagement ten minutes before we met at a rental property. I managed to print out the document and read it before the agent arrived.
I pointed out to the agent that I considered the terms outrageous and she immediately agreed to drop the relevant clauses. Clear she had previously been caught by other landlords prior to signing the terms of engagement but I bet no other landlord had done this in ten minutes..........
BEWARE & TRUST NO AGENT!

Chris @ Possession Friend

19:15 PM, 30th June 2020
About 5 months ago

Reply to the comment left by Paul Shears at 30/06/2020 - 13:00
Well done to you Paul, however the reality is that a large number - proportion of Landlords may not recognise pernicious terms in the depths of of a Lettings agent contract.
Recently we've seen an increase in previous clients asking our advice in setting up new tenancies including referencing and handling Lettings agents. ( including checking the terms of business. - contract )

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