Landlord renewal tenancy agreement agent fees

njmole

I have a property which I rent to a tenant which is coming to the end of the agreement. On completion of the agent getting the tenant in the property for me 2 years ago I paid a 7.5% fee of the total agreement plus £100 admin + VAT. This all came to about £2,500.

What I'd like to know is am I obligated to pay them another 7.5% of whatever further rent I agree with the tenant. The agent does not manage the property and the tenant has not had any contact with them since the original agreement was signed. The agent have also contacted the tenant directly asking them if they wish to stay at the property for a further term and have not contacted me at all regarding the issue.

I don't actually need or want any more involvement with the agent regarding my property and so wondered what my position is?

Thanks

G_M

Read this post:

Ending/Renewing an AST

The agent will want a fee. Whether they are entitled to one may depend on the terms of the contract you signed with them 2 years ago - read it!

But neither you nor your tenant should feel obliged to sign a new fixed term (and pay the agent for this) unless you wish to.

jjlandlord

You should check the terms of your contract with the letting agent as they may state that you still owe them commission indeed if the tenant remains.

njmole wrote: »

The agent have also contacted the tenant directly asking them if they wish to stay at the property for a further term and have not contacted me at all regarding the issue.

In such case, I would write to the tenant to make clear that this letting agent does not represent you and should not be communicated with, that any agreement made with them will not bind you, and that any monies paid to them will be the tenant's loss.

njmole

I'm yet to speak with the agent but wanted to have some idea of my situation before I did. I've looked through the terms and conditions and the only information I can find that relates to this is as follows:

Unless we are instructed otherwise we will use our standard counterpart Tenancy Agreement, the charge for the counterpart agreement is £100 + VAT, paid by the landlord and payable in addition to our commission. Our standard counterpart tenancy agreement is used to renew the tenancy to an existing tenant unless otherwise agreed with you, the charge for which is £100 + VAT, shared equally between landlord and tenant and payable in addition to our commission. Although our documents are reviewed and updated regularly by our legal advisers, we must advise you that we are not solicitors. You should consult your own solicitor if you require further information about your rights and obligations as a landlord.

When I signed this agreement, it didn't occur to me that on renewal I would have to pay the same fees again! When you sell a house, the agent takes there fee, a percentage of the price and that's it. You don't continue to pay fees on a never ending agreement which it seems is the case when you let your property!!!!

What happens if I just allow the tenancy to fall into a periodic tenancy agreement?

rpc

There must be another clause about commission. That says that they will automatically invite the tenant to renew (as they have done).

That they say the tenenacy renewal fee will be "payable in addition to our commission" suggests that there may be more commission to pay.

The clause(s) about terminating the agreement would also be worthwhile reading - can you terminate it with the tenant in situ?

G_M

njmole wrote: »

I'm yet to speak with the agent but wanted to have some idea of my situation before I did. I've looked through the terms and conditions and the only information I can find that relates to this is as follows:

Unless we are instructed otherwise we will use our standard counterpart Tenancy Agreement, the charge for the counterpart agreement is £100 + VAT, paid by the landlord and payable in addition to our commission. Our standard counterpart tenancy agreement is used to renew the tenancy to an existing tenant unless otherwise agreed with you, the charge for which is £100 + VAT, shared equally between landlord and tenant and payable in addition to our commission. Although our documents are reviewed and updated regularly by our legal advisers, we must advise you that we are not solicitors. You should consult your own solicitor if you require further information about your rights and obligations as a landlord.

When I signed this agreement, it didn't occur to me that on renewal I would have to pay the same fees again! When you sell a house, the agent takes there fee, a percentage of the price and that's it. You don't continue to pay fees on a never ending agreement which it seems is the case when you let your property!!!!

What happens if I just allow the tenancy to fall into a periodic tenancy agreement?

1) agree with them that they will not renew - issue your own renewal tenancy document or
2) allow the tenancy to go Periodic

Ending/Renewing an AST

jjlandlord

Our standard counterpart tenancy agreement is used to renew the tenancy to an existing tenant unless otherwise agreed with you, the charge for which is £100 + VAT, shared equally between landlord and tenant and payable in addition to our commission

This does not say that you instruct them to renew, just that you agree that they use their standard tenancy agreement and charge £120 if they carry out this task.

You are free to agree to a new fixed term tenancy directly with your tenant without involving the agent.

I think what is most important is what do the terms say about the commission if the tenant remains.

njmole

The one other paragraph that deals with commission reads as follows:

Property Angels commission is 10% of the total rent payable for the entire length of the tenancy stated in the Tenancy Agreement plus VAT, payable in advance at the commencement of each Tenancy and/or extension or continuation (22% of the total rent payable for tenancies of 3 months or less). Our minimum letting service commission is £587.50 including VAT.

If I agree with my tenant just to allow the tenancy to fall into periodic tenancy agreement can the agent ask for 7.5% (negotiated from 10% on original agreement) of the rent that they will pay after the existing agreement comes to an end.

It seems extremely unfair if they can, as there part in this whole thing was completed and paid for when the original tenancy agreement was signed.

rpc

It does, to me, read as though moving on to a periodic tenancy does not require payment in advance (although I reckon they would still argue for commission). It does not read as though they expected anything other than fixed terms.

I would instruct the tenant that they do not act for you and agree to move to a statutory periodic tenancy. If the agency kick up a fuss, point out that no new tenancy or extension was granted so no commission is due. You paid commission based on "the entire length of the tenancy stated in the Tenancy Agreement" (i.e. the fixed term) and that is all you are contractually obliged to pay. They may argue that the periodic tenancy is a continuation, so required commission but I'd cross that bridge when you come to it.

What does the contract say about termination?

dancingfairy

Annoyingly agents try to charge renewal fees each year (I knew they tried to charge tenants but it looks like they charge landlords as well). It's a lot of money to obtain a signature and print off a few bits of paper. Grrr. :mad:. It's not like they have to find/re-vet the tenants is it?
Can't you just give them their required notice?
df

Yorkie1

rpc wrote: »

It does, to me, read as though moving on to a periodic tenancy does not require payment in advance (although I reckon they would still argue for commission). It does not read as though they expected anything other than fixed terms.

I would instruct the tenant that they do not act for you and agree to move to a statutory periodic tenancy. If the agency kick up a fuss, point out that no new tenancy or extension was granted so no commission is due. You paid commission based on "the entire length of the tenancy stated in the Tenancy Agreement" (i.e. the fixed term) and that is all you are contractually obliged to pay. They may argue that the periodic tenancy is a continuation, so required commission but I'd cross that bridge when you come to it.

What does the contract say about termination?

Except that you've missed out what is likely to be the crucial relevant bit, which is "payable in advance at the commencement of each Tenancy and/or extension or continuation".

I am not an expert in these contracts, but it seems to me that it is at the very least arguable that the tenancy is continuing, just on periodic terms. And thus that there is some ongoing liability.