Do we need to renew our tenancy agreement with the LA?

crazymoose

Hi Guys,

Its my first post here - you all seem to be very helpful.

I have a question regarding our tenancy agreement which ends at the end of March. We've been renting our property for 6 years now and wanted to renew it for a further 2 years - we're good tenants and our landlord is good to us too.

For the past 6 years we've been charged £50+VAT for the annual renewal which we've reluctantly paid, however this year they want to charge us £115+VAT and I'm refusing to pay. I've tried haggling them back down to £50 for about 4 weeks now and they've refused to adjust the fee at each of my 4 requests, however they've just replied saying that they'll now accept £50+VAT. Our landlord is our managing agent so the LA has done very little in the past 6 years, besides send us an agreement and invoice once a year. They've been getting their 11% of the rent each month plus their agreement renewal fee from both parties and I can't help but get frustrated with their greed, especially after I asked them so nicely to reduce it to its previous level so many times.

I've spoken to the Landlord and they're also refusing to pay their half of the renewal fee. We're both happy to bypass the LA and sign a our own two year contract but neither of us are sure if we're legally allowed to do this?

Does anyone have any suggestions on what we can and should do?

Regards,
Chris

crazymoose

Does anyone have any suggestions?

G_M

If the LL is happy, then make an arrangement with him

A) If no new contract is signed, you will automatically become a periodic tenant. You'll have the same rights/obligations as before, but your contract will run month by month. You'll have to give LL 1 months notice to quit - he'll have to give you 2 months.
Advantages:
1) Agency will have NO grounds to claim a fee from either of you
2) you each get flexibility ie if you want to end the tenancy
Disadvantages
1) you have less security - LL can give you 2 months notice at any time

OR you and LL sign a new tenancy agreement for(say) 2 years without using the agency.
Advantages:
1) you get 2 years security - LL cannot give you notice
Disadvantges:
1) no flexibility - you cannot leave for 2 years
2) Agent might still claim fees - BUT see below

If you (either or both) refuse to pay the agents on-going renewal fees for a renewal they did not arrange, they may request/demand the fees, but are unlikely to go to court, and if they did, would be unlikely to win.

There has been long-standing battle between Foxtons agency and the Office of Fair Trading on exactly this issue. See explanation here. The OFT consider this practice of renewal fees as 'unfair'.

Since you seem to have a good, direct relationship with the LL my advice is to agree on whichever option suits you both best (a new 2 year fixed term or a periodic tenancy) and agree to cut out the agent.

Both write to the agent thanking them for their services to date but stating that those services are no longer required. Then ignore the letters which will follow. They may be insistant - just ignore them. Eventually they'll stop as the agent knows it's not worth going to court so nothing they can do.

edit: just noticed the agency gets 11% each month so in fact they ARE managing agents (at least in theory). I assume you pay rent to the agents? For my suggestion above to work, the LL will have to formally end this arrangement and OFFICIALLY become your managing agent. You will pay rent to him direct and he will
a) save himself 11% but
b) have full responsibility for managing the rental

If he agrees to all this, I would recommend he check out the link I gave you above - it's a website for landlords and has LOTS of useful info! In your interests too as a more knowledgable/professional LL is a better LL!

crazymoose

Thank you for the great response will chat to the Landlord and see how he wants to proceed.

Thanks again.