Questions about Tenancy Renewal, agent's fees.....

fiish

I have been renting my place in Cambridge for just under a year now, and my 12-month lease on the flat is coming to an end in about 3 months' time. Although the contracts were done by an agent the LL manages the property directly. (I would like to add here that they have done a very good job of sorting out the 1-2 issues I have had and been generally very helpful)

A letter from the agent came today reminding me of the upcoming end of the 12-month period, and setting out options for renewal. Interestingly, they are asking for a fee to transfer the tenancy to a periodic one. I have always thought that this transfer is automatic under the law if the LL and I just let the period lapse - but would the agent try to bill either of us if we choose to do nothing?

Also the letter stipulates an increase in the rent according to RPI. Given that asking rents in my area have not increased do I have the right to negotiate this? (Additionally, the RPI is negative right now.....)

Come to think of it, would the LL and I be allowed to remove the agent from the picture and just negotiate further terms between ourselves?

Fire_Fox

There is no reason to charge you a fee, as the agents were not commissioned by you, they work for the landlord. They can charge the landlord depending upon the terms of their contract. Who collects the rent - landlord or agent? You can only cut the agent out of the picture if the contract between letting agent and landlord allows.

They can try to increase the rent, and you can refuse. They are probably on a percentage cut ... I'd be inclined to negotiate in writing copying in the landlord, as letting agents have a habit of making very unreliable go-betweens. I'd start with suggesting the rent is decreased in line with March's RPI deflation and noting specific similar properties locally that are cheaper. State that you are a good tenant, and that you have been very happy with the landlord's professionalism. Then leave it with them!

Planner

Fire_Fox wrote: »

They can try to increase the rent, and you can refuse.

Assuming that there isnt a rent increase mechanism built into the contract stating that rent will increase annually by X% over RPI or somesuch. The RPI they use is normally for the October of the previous year (it should say in the particular clause in your contract if there is one).

If there is such a mechanism,, then you are contractrually obliged to pay it if they insist and you dont move out. Of course theres no stoping you negotiating.

Sammy85_2

Your Landlord is probably unaware that you have been sent the letter. I know we didnt know about the letter our tenant was sent until she called us in tears saying she couldnt afford to pay for a new agreement and begging us not to kick her out.

When we asked our agent about the letter they said its an automatically generated letter. We also found out that we would be liable for a fee of around £150 as well as the tenant for this new agreement.

Your landlord may not be able to dispense with the agent. We have looked at getting rid of our agents. Unless we change tenants for ones we have found ourselves, the fee to get rid of the agents is equivalent of 2months rent. It would take 20months for the monthly savings, to add up to the get out fee, so its just not worth it at the moment.

With regards to your rent increase, you'd have to look at the exact wording in your agreement.

Our tenancy agreements state that we reserve the right to amend rents every 6 months, but in almost 2.5 years we havent bothered. Could be that your Landlord hasnt thought about increasing the rent, and its just a standard clause by the agency?

N79

Sammy85 wrote: »

Your Landlord is probably unaware that you have been sent the letter. I know we didnt know about the letter our tenant was sent until she called us in tears saying she couldnt afford to pay for a new agreement and begging us not to kick her out.

When we asked our agent about the letter they said its an automatically generated letter. We also found out that we would be liable for a fee of around £150 as well as the tenant for this new agreement.

Did you not read the agreement before you signed it?

With regards to your rent increase, you'd have to look at the exact wording in your agreement.

Our tenancy agreements state that we reserve the right to amend rents every 6 months

Good for your tenancy agreement but unless you are issuing a new tenancy agreement every 6 months then I'm afraid you are limited to one increase a year by statute. I suspect that there are many more legal howlers in your tenancy agreement. Maybe you should reconsider ditching the agent for a competent one.

princeofpounds

fiish,

You are right, a tenancy with no renewal automatically continues as a statutory periodic tenancy with a 2 month/1 month L/T notice requirement respectively.

The agents should not be charging you as they are doing no work. The no work they are doing is not even for you!

Even if there is a new fixed term tenancy you are under no obligation to the agent as you have no contract with them. Their contract is solely with the LL who, if they want a fee, should pay them and if he likes he can insist you contribute to stay on (but that would just be silly).

Rent can only be raised by a new AST or a Section 13 notice. No other way is valid. Given that they have written to you asking for RPI, you can write back (copying in LL!) and say great, I'll take that offer of a decrease. Even if they refuse, you can always give notice to leave the contract to force negotiation on a new contract so any clause on rent escalation is practically useless.

You should communicate directly with your LL to make him/her aware of this (often LL don't even know about periodic tenancies or the fact that tenant renewal fees may even be prove unlawful pending an OFT court case). If the LA won't give their contact details, request in writing and they have to or it's a criminal offence.

fiish

Cheers to all for your help and advice.

princeofpounds, thanks for your concern regarding the LL's contact details. I have no such problem though as all my dealings with respect to the flat have been directly with the LL - the LA has not figured in the tenancy since the initial agreement was signed.

I have been in touch with the LL separately and they are fine with continuing the tenancy with everything as is. They appear to be perfectly aware of periodic tenancies

So now I need to write a nice diplomatic letter to the LA telling them no payment is due and to leave things as is please

fiish

Hmm, it seems I have been wrong and stupid. The clause on agent fees in my agreement say the fee is due for a fixed term or periodic renewal. I interpreted it then as being payable if I asked them specifically for a renewal, and not applicable if I ignored the agent, and I made the mistake of mentioning to them what I had agreed with the LL (allowing the tenancy to lapse into periodic status). They say the fee is to 'update their computers and prevent any more automated letters being sent out'.

I still think that there's something unfair/illegal about this but the agent is insisting I pay up or they will take my deposit and complain to the LL.

This will burn me to the tune of £75, and I hope other MoneySavers are and will be wiser than I was. I doubt the OFT court case will help me, or that the verdict will come out in time.

Incidentally, I also found that the LA hasn't sent me the deposit protection scheme certificate which the contract says should have been sent out within 14 days of the tenancy commencement. However, I doubt I can do much since almost a year has gone :-/

ncooper1974

Even if you signed a contract stating that you will pay a fee for a periodic renewal, it doesn't make it lawful, and it doesn't mean you have to pay.
I am a LL and had a similar issue with the agent at the end of the a 12 month term - i politely told the agent to shove it, and after a few emails between ourselves, they acknowledged they wouldn't be pursing it any further.

c'mon....£75 to update their computers?!? Tell them you'll do it for free, or better still, tell them you're happy to get a renewal letter (which you'll ignore!)

fiish

Whether or not it's lawful it's one thing - this hasn't really been challenged in court before (the current OFT case is dealing with renewal fees charged to landlords, which I hear are quite substantial). My worry is that they use an unpaid fee as a reason to make larger spurious deductions from my deposit or actively try to undermine the goodwill between the LL and me.

The contract does not stipulate when I have to pay, though, so I am going to withhold the cheque for a few days while I gather more info and decide whether or not to push back on them again.