Letting Agents Tenancy Renewal Fees

The Origins Of Tenancy Renewal Fees

What is a Tenancy Renewal Fee?

If you’ve used a high-street letting agent to source a tenant, the chances are you’re going to be inflicted with a tenancy renewal fee if you wish to renew the tenancy with the tenant after the fixed term expires (typically, it’s after 12 months).

Most letting agents charge landlords approximately 10% of the annual rental return (which can stack up to a large amount), for keeping the tenant they sourced. That fee is what is known as a “Tenancy Renewal Fee” Some letting agents even have the audacity to charge the tenant with an admin fee to renew the tenancy (as well as the landlord).

Renewal Fees are unfair

Unfortunately, I have a major problem with tenancy renewal fees, and I believe good letting agents won’t enforce them (there are plenty out there that don’t).

I understand the initial 10% fee for Finding a Tenant and performing all the essential credit checks, but to pay again just to renew the contract- that’s outrageous.

The agents don’t even have to do any extra work the second time round- so what actually are they charging for? Your guess is as good as mine. I refuse to believe that paying 10% for every year that I keep a tenant is acceptable by any stretch of the imagination. Do they still expect me to pay 10 years down the line for keeping the same tenant? Dream on. Cowboys.

My belief is, once you pay through the nose for a high-street letting agent to find a tenant, that tenant should then belongs to the landlord, not the agent. After all, what the hell did we actually pay for otherwise? But most agents consider the tenant their client indefinitely, so essentially we’re just “renting” the tenant from the agent. It’s ridiculous.

How I Avoided renewal Fees

I’ve actually been in that situation where a letting agent wanted to charge me a renewal fee- it felt like they were charging me for a service I had already paid for. For the sake of protecting myself, I won’t name the letting agent involved, because my method of avoiding the fee wasn’t exactly “legit”, so I’m told.

A while back I used a local letting agent to find me a tenant and fully-manage the tenancy. Eleven months later, the fixed term in the tenancy was due to expire, consequently the Tenancy Agreement needed to be renewed (i.e. new contracts needed to written and signed), unless I want the tenancy to become a Periodic Tenancy.

I wanted my tenant to renew so she was tied down for a set period, but at the same time I didn’t want the tenancy fully-managed by the agency anymore. I contacted my tenant and told her I wanted to manage the letting privately, without the use of a letting agent. She was fine with that because we had a good relationship, so cutting out the middleman made sense.

One month prior the expiration of the contract, my letting agent contacted me, and this was how the conversation went:

Agent: “hey, the tenancy agreement with your tenant is nearly up, would you like it renewed?”

Me: “Yes, but I’d like to handle it privately from now on”

Agent: “I’m sorry you can’t do that. Your tenant is our client, so if you want to go private you will have to find a new tenant”

Me: “What do you mean? I paid you XXXX amount to find me a tenant, and you did. Thank you, but I can take it from here”

Agent: “Ok, but you’re not allowed to do that. You can keep our client if we set the new contract up for you”

Me: “How much will that cost?”

Agent: “£400”

Me: “What? £400, just to set up a contract? I can download one from the internet for free”

Agent: “haha, no you can’t sir”

Me: “I assure you, I can. If not, I can just photocopy the existing Tenancy Agreement and reuse it. It seems as though you just want money out of me for nothing. This is ridiculous”

We argued for about 30mins, going around in circles aimlessly. By the end of the conversation we were both pretty pissed off. I eventually made it clear that there was no way in hell I was going to give them another penny for doing no extra work, especially after our conversation. At the end up it, she threatened me with legal action. I knew there was no way she was going to bother doing that (I called her bluff). In conclusion, I kept my tenant, avoided all fees, and didn’t hear from the agent again.

In retrospect, calling her bluff and refusing to pay the renewal fee probably wasn’t the best way to handle the situation. I’m still not sure how far she could have legally taken it, I’m just glad there were no repercussions from my actions. However, there are better ways to avoid renewal fees.

Just to clarify, while I was having the conversation with the letting agent, I wasn’t sure whether there was any mention of a tenancy renewal fee in the contract I signed with them or not. But it was the first I had heard of it, so I just assumed I never agreed to any such thing.

How to avoid Tenancy Renewal fees

Method 1: Use an online letting agent

It might be too late for this, because the presumption is that if you’re reading this blog post, you’re already on the verge of being shafted with a renewal fee. But for future reference, you may want to take a look at using online letting agents to source your tenants.

Notice that I’ve referred to the letting agents that charge a renewal fee as “High-street letting agents”, and that’s because ‘Online Letting Agents’ (which are distinctively different than high-street agents) typically don’t charge additional fees beyond a fixed “tenant-find” fee. That’s just one of the reasons why they’re freaking awesome.

Method 2: Ask your letting agent whether they charge Tenancy Renewal Fees

Not ALL high-street letting agents charge a tenancy renewal fee. So rest assured, even in this snake filled industry, there are still a few good men standing.

Before agreeing to use the service of a letting agent, ensure to enquire whether the agent charges the fee or not. If they do, find out how much, and whether they’re willing to waiver the fee. Depending on how business is, they may be prepared to drop the fee. I would get it in writing though :)

Method 3: Allow the tenancy to roll onto a Periodic Tenancy

The tenancy renewal fee is usually only chargeable if the tenancy is “renewed” i.e. new contracts are signed, and the tenant is tied in for a new fixed term. However, if you don’t sign new contracts, the tenancy becomes what is known as a Periodic Tenancy Agreement. If you allow this to happen, most agents can’t charge you a “Tenancy renewal Fee”

With a Periodic Tenancy, the same terms and conditions apply to what’s stipulated in the existing Tenancy Agreement, but the contract becomes “periodic”, which is dependent on how often the rent is paid. For example, if the rent is paid monthly under the original fixed term, this will become a monthly periodic tenancy, or a weekly periodic tenancy if that’s the payment schedule.

So, if the agent tries to charge you with a tenancy renewal fee, just say, you’d like the tenancy to roll onto a periodic tenancy. That may avoid the fee, depending on what is written in the contract you signed with the letting agent.

Method 4: Is the Tenancy Renewal Fee clearly stated in the contract?

When using a letting agent, you’re usually required to sign a contract with them. In the contract, there should be a clause which refers to a renewal fee (that is, if they charge the fee, of course). If the tenancy renewal fee is NOT in a contract you signed or not stated clearly, then there’s a good chance you won’t be liable to pay. There was case that went to court a few years ago, which involved Foxtons Letting Agents. The judge ruled that because the fee wasn’t stated clearly in the contract, it wasn’t enforceable. You can read more about that case here, High Court rules against Foxtons.

Method 5: Talk to your tenant

I wouldn’t advise following the rules of method 4, because I’m not sure how legal/illegal it is, or what the implications would be you got caught doing it, but I’ve heard of other landlords doing it :)

If your letting agent is adamant on extracting the renewal fee from out of your pocket, then you could simply tell the agent that you no longer want to renew the contract with the tenant(s). Simultaneously, make arrangements with the tenant to go along with the story, and tell them to in form the agency that they would no longer require rented accommodation.

At this point, landlord and tenant can continue with the arrangement they’ve always had. And if they wish to rearrange a new Tenancy Agreement between them, they can do so.

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167 Comments- join the conversation...

Showing 117 - 167 comments (out of 167)
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liansef 27th November, 2011 @ 17:47

i want to buy a activation key for my windows 7 professional, where can i buy a discount key? thank you

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Pedro 28th November, 2011 @ 16:51

Very useful advice, thank you!

We're currently in a war of attrition with our Estate Agent.
Today I received a jaw-dropping email from them, in which they admitted that they were unable to justify the fee on any grounds other than that we were contractually obliged to pay them.

In my view this is truly extraordinary behaviour - in no other industry is it considered acceptable to charge without providing some form of service.

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Francine 1st December, 2011 @ 21:52

to Pedro comment 118

The smarter estate agent refers to these 'fees' as a commission and not as renewal feels. If you have signed to wording similar to the one i signed, it says "We will liaise with the tenant and the ladlord for all renewals and invoice for all further services rendered. We are entitled to charge commission for the entire term of the tenancy where tenants have been introduced to the landlord and remain at the property even if Petermans & Co are not retained as managing agents or introduction agents. The charge will be made on a six monthly basis at a rate of 7.5%+VAT......., however this will not include any services.
Th key words come at the end. The commission is not linked to any further services. Had there been other services I would have been invoiced. However I signed up to an introduction service, and I have been managing the renewals/ new contracts.
I took legal advice and was told that as long as the original tenant(s) were resident there, then even if a new contract was signed with other family members, I was liable for the money. Post-Foxtons Ruling there was a couple of years of silence after which the agent threatened legal action. It is relatively easy to check who is living in a property - so in short this type of contract enables the agent to be paid ad infinitum for nothing.

Your options are to raise the tenants rent at the earliest legally available opportunity to cover the cost; or to ask them to leave at the end of the contract (giving 2 months notice); and to warn other landlords about the agent via online reviews.

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Kylie 26th December, 2011 @ 21:54

We are tenants who are presently renting in a rural area. We have no real option but to look for property advertised through agents, our last property was through an agent, where the same occurred. We are about to renewal our tenancy for the third time, the first (on this and our last property) was for only six months as that's the maximum the agents would allow. We used different agents on both occasions. So this is our third tenancy at our present property. Every time we have had a tenancy renewal, including the initial one, it is costing my partner and I £98 each for "renewal fees". We both work part time jobs on low salaries as we can't work at the same time as we have three children, one of whom is disabled and we can't find child-care for the holidays if we both worked the same time, so we have no option but to be in this situation. Each year, we find this £196 "renewal cost" extremely hard financially. Yes, we go through the agent, but our rent goes from my bank account into our landlady's bank account; if we have any problems we have to phone her direct; and on the two occasions she has visited the property she has contacted us herself to arrange, therefore I don't really see how the agents can justify this exorborant charge to people who obviously if they had that much excess money would be buying their own property. If anyone has any comments or advice regarding this matter, it would be appreciated. Many thanks

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phil 15th February, 2012 @ 10:47

The age old 'renewal fee' debate. Here's my two pence worth from my years of experience.

First off, for all those people complaining about being charged a fee they did not know about, it can't be charged unless you agreed to it in your terms of business (contract) with the agent. If you signed a legally binding document without reading it I would seriously question if you have the right mindset to be a landlord. If you do not take your responsibilities seriously you are just adding to a problem within the private rental sector and stand for everything that is wrong with it.

For those who have genuinely been hit with a fee that wasn't within the terms and conditions signed or not clear enough under the OFT (Office of Fair Trade) guidelines then trust in the law and go to them with your complaint.

Do not complain or try to avoid paying something you have agreed to previously, that action is no different to the ruthless agents you are complaining about.

For those that have suggested saying no to renewing a tenancy then doing it anyway without the agent knowing, agents check these things and that leaves you in breach of contract and liable for a court case, go down the correct road if you have a genuine case with the OFT.

There are huge numbers of terrible and unscrupulous agents and landlords out there who paint a dim picture of the industry. If you are prepared to take on the responsibility of being a landlord you should know what you are getting yourself in to.

As a professional landlord you negotiate the renewal fee from day one, you agree to them but at a lower rate from the initial fee. As one poster said, if they didnt stay yo would be paying that fee to find new tenants with the possibility of a void period.

This fee is tax deductable but its clear nearly all of you complaining about paying a renewal fee, you will not be declaring your rental income to the tax man.

Renewal fees are part of the industry you have chosen to be in by being a landlord. You need to be clear on this and deal with it from the offset properly, do the maths and negotiate this. No I don't agree with renewal fees being the same as the initial fee for no work, but yes, you are still receiving rental income from their work so they should receive renumeration as it saves you in the long run and comes off your tax bill anyway if you are abiding by the law.

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charlotte 15th May, 2012 @ 17:33

Honestly most people on this thread want something for nothing. Do you realise how much time an agent spends working on a property for absolutely free? The regsitration, the viewings, the marketing, all of which a fee is only paid if a tenant is found. The agent places that tenant into the property therefore a fee is due for the duration that the tenant is in the property because, without the agent, you would not have that tenant!!

Year by year your renewal fee will decrease however do not kid yourselves that there is no work involved! A negotiation in rent, contracts have to be issued signed and recieved, invoices must be dealt with, and we all know that if you want to re-let your property on the open market that you may not get the same rent as you had previously depending on your area, and it will cost you more in fees.

Please do not pretend to know what agents do day to day, how much work and how much knowledge/work is required.

It's very simple, if you do not like agents, try and rent it privately and see how much time you will waste showing the wrong people round, may end up with a tenant that doesn't have the affordability or the correct references.

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Benji 15th May, 2012 @ 21:24

Charlotte,

Will letting agents be regulated in the very near future?

Do you think renewal fees will still be allowed?

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Phil 28th May, 2012 @ 11:19

Benji,

Good lettings agents are already regulated, something they choose to do.

ARLA (Association of Residential Lettings Agents) is the main one but there are a few.

Nearly all reputable lettings agencies are a member of the Property Ombudsman Scheme and all of these still allow renewal fees.

Renewal fees are simple, for the time the landlord receives a rental income from a tenant found by an agent, the agent is due a fee (which you can negotiate from the offset).

The renewal fee argument has already been tried in court and been upheld (with strict guidelines on them being clear) so yes, these would continue to be allowed.

To all those complaining about these I would suggest declaring your rental income to the Inland Revenue and deducting that fee from your tax or stop complaining as you are breaking the law and taking from a country that is well in need of that tax revenue.

That is no better than the unscrupulous agents that give the industry a bad name.

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Benji 28th May, 2012 @ 15:53

Phil,

I was refering to compulsory regulation and it looks like the writing is on the wall for that. The 2 organisations you mention, ARLA and the Property Ombudsman, are also calling for it.

When it does happen, it seems unlikely renewal fees will escape unscathed.

I can't see what letting agents are worried about, as you say, good agents are already voluntarily regulated.
Although as I'm sure you are also aware, the enforcement powers of those regulating organisations are currently toothless.

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Graham T 5th September, 2012 @ 21:39

@charlotte

"Year by year your renewal fee will decrease...."

My renewal fee is not going down each year... its going up and up and up!!

It was £50 and now its £150!

How is that possible? Ive never had an inspection and no complaints...

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Neil Groves 25th September, 2013 @ 16:59

Hi - wonder if anyone can help me with any advice. I moved into my current property with my ex in June 2011 - the tenancy was under her name as she had already moved in during January 2011. Unfortunately things didn't work out and we split in August 2012, however the tenancy was still in her name. I eventually managed to arrange this to be amended and paid the fees etc required to raise a new tenancy agreement in my name, without argument or fuss. However this is now up for renewal at a wonderful value of £125. Reading through the previous comments etc, it states renewal fees are for marketing, advertising and finding a tenantt - HOWEVER, the letting agent has not had to find a tenant as there was already one living there (Me!) - Does anyone else think that therefore the renewal fee should not be applicable, especially as I can find no mention in the tenancy agreement in regards to this?

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Paul Nash 19th November, 2013 @ 12:17

I have a question that I can't seem to find an answer to on the internet so would really appreciate any advice. I rented my property out this March. I found tenants myself but wanted to go through a letting agent to manage the funds. After nearly nine months and the tenants have always paid on time and are happy I've decided I no longer want to use the letting agents, however they're not agreeing to release the tenants and said that I'm bound by the T&Cs. So even though this is my tenant and I stupidly didn't think that I would be tied into the contract in the same way as I would had I not found the tenants, I am still bound by the same rules. The letting agents are not budging. Has anyone been in the same situation or have any advice? It would be greatly appreciated.

Many thanks,

Paul

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phil 19th November, 2013 @ 12:32

If compulsory regulation comes into force I for one welcome it, but please do not be under any illusions that will change renewal fees, the Foxtons ruling was very clear and that is the legal precedent on these fees, rules on ensuring they are clearly set out may be enshrined where they are currently not but that would be as far as it goes.

Paul Nash, what does your agreement with the agent say regarding cancellation of the management agreement as that is all you have with them?

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Jan 9th January, 2014 @ 20:42

Within the past two years, the lettings agents have been collecting rent from my tenants at 8%. I have now found out that my tenants want to stay long term and I am considering collecting the rent myself.

After speaking to the lettings manager, she told me she would drop the rent collection from 8% to 4%. I then asked her what would happen if I collected the rent myself. Her answer was £600 plus VAT!

I would like to know if anyone else has had this experience and what did you do??

Many thanks
J

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Anne 26th February, 2014 @ 09:58

Hi,
I'm renewing my tenancy. Same price, just an extention. My tenancy agreement states that I have "to pay the agend £69.60 including VAT towards the cost of any renawal document created for any extension of the Tenancy". The agency is asking 84£ because the price is increased this year, but nobody notified me this change in any form (written or oral) during the past months and during the negotiation period (just 5 minutes, because I managed directly with the landlord renawal agreement.

I'm a foreign, so I don't know English laws.
Please, can you help me?
Regards

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Raj 26th February, 2014 @ 21:29

I have a question- I signed up with a letting agent last year who for a fixed percentage agreed to a fully managed service. This included visits to the property as well as rent collection etc. The year is almost up and it has asked me what service i want for the coming year- fully managed for £100 pm or let only for £50pm. It appears that these are the only two options.

My concerns are that having checked with the tenant the agent has made no visits to the property to date (10 months). As such I cannot see what it has done to justify the fee last year compared to let only.

I also struck out the clauses on renewal fees in the contract which I signed with the letting agent and I returned to it which it accepted (probably didn't check this out itself). As such do you think I can simply tell them to sling their hook re renewal fees.

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Robert Fitzgerald 23rd April, 2014 @ 14:14

An issue has just arisen with a prospective new tenant.

Agent A was letting my property after the previous tenants moved out. Having had no success in finding a tenant I approached a second agent. The second agent found a tenant straight away.

When I mentioned this to Agent A they said fine unless the tenant was Mr. X which it turned out it was. They said that they had shown Mr X. around the property twice but had not arranged an agreement with him as he had not exchanged contracts on the SALE of his house.

They are now saying that they are entitled to their introduction fee, I did point out to them that I had had no knowledge of them showing Mr X the property or I would not have used Agent B. The only reason I used Agent B was becasue Agent A had not been able to find a client....... whereas it appears they had but had not told ne about it.

Does anyone have any advice?

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Johnathan 13th May, 2014 @ 21:38

amazing how many people do not read their contracts then complain later about renewal fees. Its your own fault and you signed a contract. It's quite simple and I have to explain this to everyone. It just boggles the mind how many people who are wealthy enough to even own a second or investment property can't understand this concept of renewal fees. You would think these people would be business savey enough to comprehend the purpose of the fee. I found and procured a tenant for your property which will produce 1 year of rental income to you. For every month that tenant stays, I deserve a percentage. 99% of the time after the lease is done and the tenant moves in, I receive calls all year long to handle property related items and end up doing more work throughout the year that I did to actually find the tenant initially, yet landlords are so cheap they expect you to make multiple trips to the property and handle all tenant relations for free. MIND BOGGLING

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bharma 19th May, 2014 @ 10:13

As a reputable ARLA licensed agent, I really do object to constantly being told that we don't do any extra work for renewals.. this is simply not the case. There is in fact hours of work involved in renegotiating terms, drawing up arrangement's, they take weeks to chase back as tenants and landlords are understandably more laid back about getting these documents signed than the initial tenancy agreement at move in.

We have to rewrite them, contrary to popular belief, we do not simply copy and paste, there is a whole heap of new legislation that now has to be included, registering of the TDS, we have to re issue the TDS information, set up new standing orders in most cases, date and execute the agreements, re issue stamp duty information again.. plus updating the system, memos to accounts etc etc

I start a renewal 3 months before the end of the tenancy and very rarely is everything complete by the expiry date. The paperwork updates and grows year on year and new legislation and schemes are brought out.. all btw to protect tenants.

Regulate agents, so that every Jo Bloggs can't just come along and open one..

My colleges and friends who are estate agents work very hard and really care about what they do.

This agent wrote an interesting article about what agents actually do for their fee
http://www.concentriclettings.co.uk/about-us/news/should-agents-charge-tenants-fees/

Have a good week all

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Lenny Victor 2nd June, 2014 @ 16:04

Some of the comments here, especially by letting agents, are plain nonsense, and have no lawful basis whatsoever. Let's go back to the beginning and examine the relationship between the parties:

One agent claims the tenant is "my client". Not so. The agent represents the LANDLORD, who engages the agent to find a suitable tenant. The agent CANNOT fairly represent both Landlord and Tenant at the same time (unless he is a notary and even then it is doubtful). The reason is simple: conflict of interest. Landlords are being systematically ripped off, but so are tenants, and with zero choice.

When a tenant walks into a letting agency, he is NOT engaging the agents's services, just as a buyer is not contracting with the Estate Agent, who works solely for the SELLER. Therefore any fee charged to the tenant is strictly speaking unenforceable, save for REASONABLE expenses at best. Unfortunately no-one with enough cash to risk has properly challenged this in the courts, but it is only a matter of time before the wretched agents are outlawed, as they have been in Scotland.

The moment a letting agent attempts to charge a tenant, he is establishing a fiduciary relationship with that tenant, and owes him a duty of care, but that cannot be because the agent does not act in the tenant's interest, but that of the landlord. He most certainly does not act in the interests of both, and arguably acts for neither given the exhorbitant charges levied on both.

In Scotland this has been recognised as both exploitative and absurd, which is why letting agents are now banned in Scotland from charging the tenant anything at all, except a deposit on behalf of the landlord.

99% of UK agents charge outrageous fees on both parties. A credit reference can be had for £2. The agent charges as much as £100 for this...pure scam. The agents typically also charge tenants merely for registering, which they fail to return even if the lease is rejected by the tenant for perfectly legitimate reasons. This is appalling exploitation and there is a solid case here of unfair terms and conditions, and imbalance in rights of parties which OFT should REALLY be addressing but has utterly failed to, despite this being clearly a breach of OFT rules.

Similarly the ICO has sided entirely on the landlords in allowing them to snoop and research on the tenant's personal data while denying the tenant the right to reference the landlord (some of whom have no right to let or are behind with mortgages, or for that matter the agent, who is entirely unqualified and unregulated (see below).

The whole business stinks. Where honest and decent landlords are operating, they too are conned into paying renewal fees (a quick photo copy of the previous lease) for absolutely no work in return by these work shy spivs.

My advice to both tenants and landlords: Cut out these ghastly con-men and go it alone. It is possible to get decent references on both sides using old fashioned methods which were perfectly sound before the current method used by agencies.

Furthermore, I cannot see any lawful basis on which an agent can lawfully fleece both tenant and landlord at the same time. The courts will be aware of the rank exploitation by these two-timing agents who simply cannot be on both sides at once. Doing so means they have a fundamental conflict of care and duty to both parties at once and that is impossible. This needs to be challenged by a good hearted lawyer (if that is possible) with flawless knowledge of agency law, OFT regulations and landlord and tenant legislation.

The only reason these slime ball agents are allowed to exist is because former housing minister Grant Shapps (aka Michael Green, the get rich quick scam artist and google rule buster) deemed the letting agency business to be healthy and not in need of regulating, in contrast to the Scots who quite rightly begged to differ.

By the way ARLA is NOT a regulator. It is a vested interest agents' association and has about as much regulatory clout as a bucket of dish water.

Landlords: please cut out the spivs and save a fortune. Tenants, give these lazy good for nothings the contempt they deserve. Letting agents are a complete con and should be avoided. Avoiding them en masse will close 'em down soon enough!

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Jamie 11th June, 2014 @ 07:15

Our agent has just emailed us 3 months before the tenancy has ended to tell us it will be £90 to renew! Our LL has handled everything since we moved in but the LA have told us we need to pay them then money to send out new contracts. Outrageous!

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andrea smith 19th June, 2014 @ 14:40

My contract with my property management is due to expire in 2015 and I have advised that I would not wish to renew this, however I like my Tennant's so requested to take over the management myself. They have advised that as long as the Tennant's live in the property regardless if the contract is in place they have the right to request a management fee until the Tennant's vacate is this correct.

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cardifflandlord 19th June, 2014 @ 15:12

Hey Andrea,

I'd say it depends on the wording of the contract you signed. If it was there and you did not read it or signed it without understanding it then that's down to you i'm afraid and they probably have the right to the payment.

HOWEVER, it is highly likely that the contract falls under the unfair contract terms legislation for it's unreasonability (why should you pay them for the next 5 years when they do nothing yada yada) so I'd have a chat with a legal professional to let them look at it. Spending a few bob now will save you loads of hassle in the future.

CL

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cardifflandlord 19th June, 2014 @ 15:14

@ Lenny Victor

Bloody well said!

CL

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Hove Tenant 26th June, 2014 @ 20:22

My letting agents are asking for £60 admin fee, just to to allow me continue to stay on a periodic tenancy. Not even a renewal! So, in effect, they are asking me to pay a fee for doing, not only hardly anything...... but actually....NOTHING!

Their first letter was little threatening with CAPITALS. They asked me to confirm that I wanted to stay and then pay the £60, otherwise be aware that i must give notice in writing. It made it sound that I would have to leave if i didn't pay. The 2nd letter was little less threatening, but still asking me to confirm I wanted to stay, so that then they could charge me admin fee for periodic tenancy at end of tenancy.

Can they charge me this fee for this? I signed a 6 month contract in mid jan 2014 and have paid my rent on time.

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WaterTiger 19th July, 2014 @ 09:15

The law of averages suggests that there must be some decent agents around — mustn’t there? — but most of them seem to be the kinds of slimy, money-grubbing sh*ts you’d expect without any imposed ethical framework or regulation of their activities.

I bought my first house complete with (utterly brilliant) tenant about two years ago. My parents had owned a couple of houses for a while and had been very badly stung by agents who took fees, but did naff all. (Have you heard the one about the longstanding tenant who died and it turned out his son had been living in the property for over ten years without the agent noticing, so had the right to remain on a regulated tenancy? The solicitor said it probably wasn’t worth suing the agents as they were a nationwide company with much firepower…)

I was determined not to have an agent, although the agent used by the vendors of my first house tried very hard — including, I discovered later, putting no little pressure on the tenant to try to persuade me (seriously!) — to make me keep him on. I quickly worked out why he was so keen. It turned out that he had not only been charging the owner agency fees, but he had been charging the tenant SEVENTY POUNDS TWICE A YEAR to ‘renew’ a standard assured shorthold tenancy — and to add insult to injury, he even made her (she doesn’t drive) go to his office to pay!

Anyway, @Hove Tenant, I don’t KNOW, but I really think it probably is not legal, especially if it wasn’t mentioned to you at the outset. Check your copies of all paperwork: did you accidentally sign something saying you’d pay to have the contract renewed? As I understand it, as long as the owner and tenant have no issues to iron out, the terms of the contract remain in force until one or other party gives notice.

Shelter says that ‘If your fixed term has ended, your tenancy will become a periodic tenancy (and will run from month to month or week to week)’, which seems straightforward (except that ‘if your tenancy is periodic or if the fixed-term has come to an end, your landlord can evict you fairly easily. There is no need for your landlord to give a reason to the court but they must be able to show that you have an assured shorthold tenancy and that the correct notice has been served’).*

Information on Landlord-Law Blog** on this very subject suggests that the agency can’t do this legally: ‘It is a tenant’s right to stay on in a property after the fixed term has ended (s5 Housing Act 1988). Any tenancy agreement term which prohibits this (if it exists, check your tenancy) will almost certainly be considered ‘unfair’ under the Unfair Terms in Consumer Contracts Regulations 1999.’ (This page also refers to a campaign by Shelter that might be worth investigating.)

There’s probably further information online, and you might also check with Citizens Advice or similar. Do let us know how you get on!

* http://england.shelter.org.uk/get_advice/private_renting/private_renting_agreements/assured_shorthold_tenancies
** http://www.landlordlawblog.co.uk/2013/07/24/can-letting-agents-insist-on-a-new-fixed-term-rather-than-a-periodic-tenancy/

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landlordpete 24th August, 2014 @ 12:51

So many comments - but perhaps they can be summarised as:

Landlord: "I signed something which I either didn't read or understand, and now rather than admit to my own stupidity I think I have a right to blame someone else. Yes I know when I was looking for an agent there were others who are long established, regulated, qualified and have an independent redress scheme, client monies insurance, etc, but I saw that I could save a few quid by going to the cheapest'

So how about another thread along the lines of:

Landlord: "my tenant signed a tenancy agreement and they are now saying that although the issue that they are raising is written in the agreement they signed, they don't wish to abide by the terms as they claim they never read them properly. This is totally unfair, outrageous in fact and all tenants are therefore scumbags. I'm an honest landlord, honest guv. Qualifications, training, redress scheme? no, I don't have any of those because I'm an expert and tenants should just do what I tell them'

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Jamie 24th August, 2014 @ 16:24

@Landlordpete Landlord's like you are a disgrace. You say you are a good honest guy, but you are charging people through the nose to pay your mortgage. I earn a very good wage and do not have a hope in hell of affording a house in London. All because of selfish landlords like yourself. You should be ashamed.

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landlordpete 24th August, 2014 @ 17:45

Jamie, you don't seem to be able to read.

I was pointing out the fact that, whether you are a landlord or tenant, you are entering into a legally binding contract, the terms of which you should read and understand, or ask for clarification, or take them to someone who can explain, or else not sign it at all.

I could then go one to argue that I have gone from being a tenant to now being a buy to let small business owner with huge borrowings.

I could point out that I have foregone flash cars, large tv's, holidays and other of life's luxuries so that I can establish and grow my small business and climb on to the housing ladder.

I am a small business owner, just like the corner shop who provides you with convenience of food when you want it. I provide a place to rent when people want it.

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Jamie 24th August, 2014 @ 18:10

No Pete, you are just scum. Charging people way above the going rate to live in your crappy apartment.

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Ray 7th March, 2015 @ 00:02

my only advice is before signing anything "READ" 98% of the tenancy agreement and landlord/lady agreement, would say, owner can't renew the contact directly with tenants.

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Kate O'Hara 20th May, 2015 @ 03:48

I have found the comments to be very informative. The main take-away is, READ THE CONTRACT before signing, and if you don't agree, then question it and negotiate the terms. That is what I shall do tomorrow. Many thanks to all who have written from all sides...... LL, LA, Tenants. (I am a landlady - no moustache).

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Sean Atkinson 22nd August, 2015 @ 18:05

All agents are parasites sucking a living from other peoples assets, you are disgusting people and I hope you all go out of business.
cheers

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Mike Stanton 23rd September, 2015 @ 06:49

Can't believe the comments I've read here

I'm a letting agent with a great record of getting great quality tenants for landlords and the tenants staying for a number of years at a property
Now here are my points
1. If you as a landlord sign my terms which are on one page only and clearly show renewals are due ( which by the way we only charge for one extra year) then a landlord should pay.
I detest alot of the comments were scum, blah blah, if you do don't want to pay renewals make it clear at the outset not once we invoice you
2. You as a landlord are deriving income from a tenant I have introduced, yes you paid at first introduction but you as a landlord your still getting income from my tenant !!
3. If you don't like agents... Simple do it yourself
4. I've heard it all before, you can do your own viewings, contracts etc. All this takes valuable time and organisation, as with the referencing. Due to my experience I've weeded out fake tenants even if they pass a credit check but doing more background checks on their previous landlord etc..
5. Because of above I save landlords a fortune on a tenant who wouldn't of paid rent!
6. The same people complaing about agents are happy to call or sit in one of our offices for hours asking advice
7 . Again all these people harping on we get money for nothing etc. I generate excellent rent increases which help with the landlords income

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Cardifflandlord 23rd September, 2015 @ 12:26

@ Mike: Blah blah blah.

Your point two just goes to show you don't get it.

It's NOT your tenant. Your Landlord paid you to find them and then manage them and no doubt you are still getting an income too from the management fee you charge.

There are some very good agents, I have one now, however there are even more scumbags some of whom I have used in the past the same way as there are some great landlords and some scumbags too.

I too detest agents who fail to pay me on time, charge extortionate fees, lie to me, can't be bothered doing any training or join a trade association etc.

Get over it........

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Claire 4th February, 2016 @ 14:45

My tenant wants to move out of the property during fixed term, which he is not allowed legally (no break clause in his contract). However, if he does move out without paying rent, is the letting agent legally obliged to find me a new tenant or refund the remaining agency fee?

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landlordpete 4th February, 2016 @ 17:42

Claire,
I would say that it depends on the contract that you read? and agreed to with the letting agent, or if you can prove that the agent has been negligent in their duty of care to you, i.e. failed to provide the service level that they said they would in terms of say, referencing.

If the agent is trusted, established, regulated, etc they may well have an interest in reletting your property to a new tenant, therefore although they may not be willing to provide you with financial indemnity should you get a bad tenant, they may provide advice or assistance in pursuing the outgoing tenant for their debt.

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Lea 4th February, 2016 @ 21:56

We are half way through our tenancy, originally through a well known agent. Our landlord has now taken over the tenancy due to the agents very bad management and a massive lack of interest and response to quite a few issues we have had with the property!
My question is - now the landlord will be dealing with us direct and the rent goes straight to them every month, I'm I within my rights to ask the landlord to reduce the rent by 10% as they will no longer be paying that to the agent!

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Claire 4th February, 2016 @ 22:21

@Lea

I do not think that is you are within your right to get the rent to reduce.
First, you have signed the contract with a fixed rent
Second, The landlord usually paid the agent upfront in lump sum of all agency fees
Third, the landlord will now have to manage the place, time and effort = money.

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Block 13th April, 2016 @ 23:20

Hello, and help! :)
Our landlord wants to leave his contract with the estate agent because of the renewal fees. And he wants us to stay on, while lying to the estate agent - telling them that we're leaving, and giving a different name if they come round. To be honest the estate agent does nothing (we've been here a few year an only hear from them when they want to renew the tennancy). We have a good relationship with the landlord who manages everthing himself.

I have 2 questions

1. Would he have to pay the estate agent if we don't renew and simply let it run month to month?

2. I understand they can sue him for breach of contract if we stay on (and sign a new agreement with him) but is it possible for us to get in trouble? There's nothing in the OUR tenancy agreement.

THANKS!!

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Dean 11th May, 2016 @ 11:50

I registered my flat with a Letting Agent in London to find me a tenant on a let-only basis in 2012. The tenant has stayed in the property. The agent has not even printed a new letting agreement since the tenant moved in 4 years ago. I manage the property, the agent does NOTHING at all. Not even a renewal contract, so the tenant has been on a periodic tenancy for the last three years.

Every year the agent sends me an invoice for £1,800.00 which I've complained about but I've paid it.

This year I refused to pay another £1,800.00 because I'm paying them for nothing. It's like being mugged in the street. It is blatant profiteering by this letting agent. They are threatening me with a debt recovery agent.

I think I will have to get a solicitor on the case.

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Pete 11th May, 2016 @ 12:21

Dean, you're a muppet

Presumably you read the contract with the agent before you signed with them ? or did you just go for the highest rent, the cheapest fee, sign where told to and assumed 'well, all letting agents are the same' ?

Presumably your tenant entered into a contract with you and presumably you would be miffed if the tenant said that they didn't feel like paying you any rent this year because mortgage rates remain very low ?

Stop whining. You have yourself to blame not the agent. Next time find a reputable agent and READ THE CONTRACT. Oh, and be prepared that for the right, reputable agent you might not get it at bucket shop fees.

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The Landlord Avatar
The Landlord 11th May, 2016 @ 12:30

@Dean

Every year the agent sends me an invoice for £1,800.00 which I've complained about but I've paid it.

Holy moly! Why did you pay?! Generally, agents can't/don't charge a renewal fee if they tenant rolls onto the periodic tenancy, because the agent isn't doing any extra work.

What does your contract with the agent say about "tenancy renewal fees"?

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Dean 13th May, 2016 @ 12:26

There is no specific section in the contract with a heading of "Renewal Fees", nothing that obvious!

However, I found a not-so-obvious a line tucked away in the contract which states that "If the initial tenancy is extended whether or not negotiated by the agent, a fee is due as a percentage of the gross rent payable throughout the entire period that the tenant remains in occupation of the property".

The agreement I signed was to FIND the tenant only. Therefore this agent does NOTHING at all. They don't manage the property or look after it in any way whatsoever. I have my own maintenance people who look after the property. The tenant pays the rent directly to me as per the agreement.

The only thing the Agent does is phone the tenant once a year to check to see if the same tenant is still in my flat and then send me an annual invoice for £1,800.00. If I protest or query it I get threatening letters for debt recovery. So I've been paying it.

@Pete: This is a major international agent, letting executive properties in the City of London, Canary Wharf, Singapore etc.. annual renewal fees of £1,800.00 for doing nothing are not exactly bucket shop fees! If they were doing a fully managed service I'd be looking at £3,200.00 per year

After four years of this rip off nonsense and having already paid £7,200.00 to this agent, I'm saying NO MORE of this.

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Damian 16th June, 2016 @ 16:46

New to this rental thing we are tennants signed up last September and the letting agency has just contacted us ask for £160 for signing for another 12 months!!!! Why and is this right???

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Annie Grant 25th June, 2016 @ 17:10

I am a tenant renting with KFH They are a joke !! They have told myself and te landlord that we both have to pay £210 plus Vat to renew the contract that is exactly the same as it was last year . Only difference is the year 15 to 16 . Shame on you KFH

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Pete 25th June, 2016 @ 19:27

Dean,
If you believe that the service was for tenant find and you were not told the level of % that these fees were then I suspect you have a strong case to challenge them. Talk to your local trading standards office for advice.

Annie,
I agree, the fees are a joke, but how about you blame your landlord for agreeing and signing those terms in the first place and how about you learn a lesson to read your contract before signing ? If the information was clearly and readily available to you at the time, it is no good complaining after the event. If the information was not clearly and readily available to you at the time, then complain about it - ideally jointly with the landlord and first to the company and through their complaints procedure and then through their ombudsman scheme or trading standards

Next time - BOTH OF YOU pick and agent that doesn't just offer cheap fees and the most rent. Deal with people who have a good reputation and are straightforward to deal with.

As well as being a landlord myself I'm a letting agent (we don't and never have charged renewal fees, unless we are asked to do something specific at the time) and I continually lose instructions to stupid or greedy landlords who just instruct on the highest valuation figure and the lowest up front costs.

Guess what? they can't magically achieve more rent than the market can sustain and they make up for the low headline rate by charging extra for everything thereafter.

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Jules 1st November, 2016 @ 16:24

Hi there,

I'm a tenant, and I'm in the process of renewing my tenancy agreement for the 2nd time. I was aware that there was a renewal fee, and I paid it the last time, even though £125 for a one page addendum seemed a little excessive.

This time round however, my letting agency are telling me that I can't renew via addendum, and have sent me a brand new tenancy agreement to sign. There has been an increase in the rent, and I'm renewing for another year. The rent amount and the date update are the only clauses that I agreed to updated.

At present there are a number of issues with the new tenancy, including new clauses that weren't part of the old agreement, and clauses that are missing from the new agreement that were in the old one. In the new tenancy agreement, they have increased the renewal fees by almost 70%(!), and I'm wondering if they can do this, given that my original agreement, which I'm renewing has these set at £125.

Any advise on whether the agency can do this and how I can fight it would be much appreciated?

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Sam 25th November, 2016 @ 13:07

Re: FIXED TERM OF 6 OR 12 MONTHS DUE FOR RENEWAL(Subject to Contract) Fee: £60.00

My LA have sent me a letter regarding the above, I do not want to be in a fixed term tenancy as I live in a 1st floor flat, There is no soundproofing I hear everything my neighbours below/above do, I have spoken to LA and neighbours and the problem has got worse! being in a fixed term contract is preventing me from moving as LA state having noisy neighbours is not a good enough reason to want to move and end a fixed term tenancy.

Also LA state that the LL has already agreed on a further fixed term of 6 or 12 months Tenancy.

Can I as a tenant, write directly to my landlord outlining this issue and ask that I may be allowed to continue renting on a month to month basis so that I am not caught in a catch 22 situation.

I am in receipt of LHA with a guarantor. I lived for 16yrs at my last address with no fixed term tenancy agreement.

I would be grateful for any advice, as I am new to Private renting and thus find myself and son homeless over this matter.

Kind Regards

Sam

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The Landlord Avatar
The Landlord 25th November, 2016 @ 13:13

@Sam,
Yup, under Section 48 of the Landlord & Tenant Act 1987, you're entitled to a contact address for your landlord.

Explain to the landlord you want the tenancy to roll into a periodic tenancy (which is perfectly reasonable), which should also mean he doesn't need to pay the LA any renewal fees.

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Sam 25th November, 2016 @ 22:22

The Landlord
Thank you so much for your assistance with regards to my post(165), you have been very helpful.

Kind Regards
Sam

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