Renewal fees from letting agents – READERS QUESTION

Renewal fees from letting agents – READERS QUESTION

10:11 AM, 22nd August 2012, About 12 years ago 36

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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


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Comments

Reader

17:59 PM, 17th December 2012, About 12 years ago

Remember contractually you can probably counter claim for the repayment of excessive fees charged in the 6 years before the start of any action. So the agent may well delay proceedings in order to prevent you claiming back any fees in the intial years of your contract. Your alternative is to intiate an action against them if you feel you have a good case. That may well be sufficient steps for you to negotiate a settlement and a move to a new agent or a new contract with your existing one.

21:24 PM, 26th January 2013, About 12 years ago

I have been following the discussion about unfair renewal fees with interest. I am a landlord and let out one flat in central London. My current tenants have just moved out and this seems like an opportunity to negotiate a fair renewal rate. There has been a lot of discussion about unfair rates but I just wonder whether there are any views about what would be a fair rate or range of rates - assuming that there is generally very little work involved in renewing. I am currently paying 7%. Is a fair rate one that is a low percentage or is a fair rate one which declines year on year or perhaps even ends after, say, three years? My current thought is that 7% first year, going down 1% per year after that might be acceptable.

Mark Alexander - Founder of Property118

22:30 PM, 26th January 2013, About 12 years ago

Hi Michael, a fair rate in my humble opinion is a nice round number 0, zero, nothing, nada. Before you agree to anything PLEASE check this out >>> http://www.property118.com/index.php/find-me-a-tenant/

1:47 AM, 27th January 2013, About 12 years ago

Do you seriously believe that renewing an AST will force the tenant to stay the full AST term!?
If you do; you are living in a dream world!
All an AST will do is stop you evicting the tenant except within certain timelines.
A tenant can leave ANY time they like and there is NOT a thing you could do about it.
So don't bother renewing.
The AST just proceeds onto a SPT.
No fees are required as you are not renewing the AST; just continuing it.
Can you not manage the property yourself!
You could visit every month and still not pay as much as you are with this LA.
If you can dump the LA; they are not needed if you can manage things yourself..
Use online LA for advertising.
In fact the package that Mark has posted about is probably the best deal in the country.

16:20 PM, 3rd February 2013, About 11 years ago

Thanks for the advice Mark (and Paul). That's very helpful.

Sarah Peach

12:46 PM, 4th March 2013, About 11 years ago

Hi Tracy
Just wondered how you are getting on with this as I too have a big issue with the same agency on the same subject... Have things been resolved? Any update would be gratefully received. I hope things went your way/are going your way!
Sarah

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