Renewal fees from letting agents – READERS QUESTION

by Readers Question

10:11 AM, 22nd August 2012
About 6 years ago

Renewal fees from letting agents – READERS QUESTION

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Renewal fees from letting agents – READERS QUESTION

Readers QuestionsI have a question regarding renewal fees from letting agents and would very much welcome any feedback or advice that readers of Property118 can offer.

I have used the same letting agent for the past 7 years. I do not have a portfolio so felt it would be best to use an agency. The agreement I entered into back in 2004, provided for all renewals to be  charged at 8%. For the first 3/4 years 2 new tenants were introduced and there was one renewal which I renegotiated at a reduced rate of 6%. For the past 3 years the same tenants have stayed. I have negotiated the rent increase, organised the relevant certificates and done the tenancy agreement. The agents have done nothing and did not raise an invoice for the 2011 renewal so I assumed they had accepted they should not be paid as they have done no work on either renewal.

However, they have now sent me an invoice for 2 years worth of fees which I have been arguing with them. I have done some research online and it seems there may have been a change in the law on enforceability of renewal fees in recent years. having checked with a couple of agencies locally they tell me they only charge £120/£150 for renewals whereas my agent wants to charge the full fee.

They have offered a 25% reduction but that still leaves me with a bill of over £1500.00, if I do not pay they will take me to court in the next 14 days. I will also be in exactly the same position next year if the current tenants renew again.

I have found a couple of cases that deal with the point almost in favour of the landlord, that the courts have looked at, but I wonder if there is anything else I can present to them. They have refused to tell me what the renewal fees are for their 2011/2012 landlords.

Question is should I chance defending the potential court action in he hope that the Judge will agree the 2004 contract terms are unfair?

If you have any suggestions I would appreciate your input, also this may help some of your readers who could be in a similar position as me.

Thanks and regards

Tracy



Comments

Mark Alexander

12:33 PM, 22nd August 2012
About 6 years ago

Hi Tracey

Are you in Court in 14 days time or have you just received a letter threatening court action if you don't pay up within 14 days?
From what you have said, and without even reading the contract, I would not pay until having consulted a Solicitor and taken advice. Do you have a copy of the contract?
I have no doubt that many opinions will be expressed here, simply because whatever the contract says it seems unfair (based on what you have said).
You may find these articles useful >>>
http://www.property118.com/index.php/oft-warns-letting-agents-about-unfair-contracts/10682/
http://www.property118.com/index.php/landlord-wins-unfair-fees-case-against-letting-agent/502/

If you would like me to refer you to the solicitor I would use to get formal advice please drop me an email - mark@property118.com

16:56 PM, 22nd August 2012
About 6 years ago

Hi Tracy,

My name is Polly and I work with Mark Alexander at Leathes Prior Solicitors. I am a Solicitor in Leathes Prior's Dispute Resolution Team which deals with Property Litigation.

If you would like to contact me to discuss your query further then please call me on (01603) 281113.
Kind regards
Polly Langford

17:02 PM, 22nd August 2012
About 6 years ago

Tracy,
the OFT hasan excellent guidance page on unfair terms in consumer contracts
which includes renewal fees and can be found here http://www.oft.gov.uk/OFTwork/consumer-enforcement/consumer-enforcement-completed/foxtons/qandas
If the agent is registered with us, this may also be a matter the Ombudsman
could consider if you are unable to settle the dispute directly with the agent (admin@tpos.co.uk or 01722 333306).

17:58 PM, 22nd August 2012
About 6 years ago

Most Letting agents are basically parasites. Give notice to end your relationship with this one asap. If there is a next time read the contract carefully - strike out all that you are not happy with (it will be most of it!) sleep on it then self manage as you will almost certainly do a better job. LA should be used to introduce tenants to you only - and paid a finders fee once - not over and over - di they get lost and need re-findong ?!

Barry Hayden

18:29 PM, 22nd August 2012
About 6 years ago

What are these renewals? If they are new tenants - okay the fee to your agents are negotiable, but am I reading that they are renewing the tenant's "contract"? My experience of Tenancy Agreements is that the Tenant starts with an Assured Shorthold Tenancy, which flows into a Periodic Shorthold Tenancy after an agreed period. There is no "renewal" - it's done automatically, and stays until the Tenant leaves.
I suggest you sack the Agent, ignore the 14 day notice they have given you, seek legal advice, and manage the property yourself!

19:57 PM, 22nd August 2012
About 6 years ago

Hi Tracy
It does seem as though the renewal terms are unfair and I'm sure a solicitor will be able to advise you on this.

Irrespective of the unfair terms - I think you should consider terminating your agreement with your greedy letting agent that thinks its ok to charge fees for services that have not been requested or authorised by you or delivered by them.

I would suggest that there has been a breakdown in confidence and trust between you both and I would be telling this agent that you will not be bullied or threatened and you will be taking your tenant and tenancy elsewhere.

I also agree that involving the ombudsman would be a prudent step forward - but membership of the property ombudsman for letting is, unfortunately, not mandatory for letting agents .... so probability is that they haven't joined!

Good luck ....

Mark

21:27 PM, 22nd August 2012
About 6 years ago

Hi Mark !

21:37 PM, 22nd August 2012
About 6 years ago

As a letting agent, they are over charging you, if its the same tenant then a good letting agent wont charge you as its not a renewal, but a rolling contract. You want to try being an agent you cant keep the tenant or the landlord happy:)

23:08 PM, 22nd August 2012
About 6 years ago

A new AST has been signed each year negotiated and "done" by LL. This would appear to be a renewal ? Rolling contract is undesirable for many (both LL & T) so annual AST's more popular. Ovecharging is an understatement for rolling contract - no work = no payment. Press print and witness lease 8-10%fee - utter rip off and nonsense. A solicitor charges ,£20 to countersign a sworn affidavid - which quite frankly is far more complicated that pp'ing a sig on LL behalf on a renewal AST -? Being an agent is simple - learn your place in the agreed equation with clearly set out, well explained and agreed and fair parameters. I have yet to see a LA agreement that i have signed without re-writing it....and that is for tenant find only, nowadays when they say "here are our terms" and slide the agreement accross the table - i drop a copy of mine on to and say "and here are mine" have a read, if you are happy - we can proceed, if not - it was nice talking to you . La have 2 choices work with me or don't- my props - my terms. If a LA would like 8-15% of turnover - then he may have t when he puts 8-15% of the prop val on the table !

Joe Bloggs

23:14 PM, 22nd August 2012
About 6 years ago

amazed no ones mentioned the foxtons case.
http://landlordlaw.blogspot.co.uk/2009/07/oft-v-foxton-case-commission-on.html

i had the same situation a few years ago with threats of litigation. i cited this case although its not that definitive and the agent went away. i dont use agents anymore...its so easy to find tenants now with rightmove available at reasonable cost (and demand so high) why would you want to deal with agents. in my experience they dont look after the landlord and are happy to lumber you with any dross tenant. if you want to limit your involvement use agents just for management, but find the tenants yourself.

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