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Contract renewal fees

Hi,

We're looking a letting a property, and in the LA's application to let it states "Please note we do not offer Periodic Tenancy (monthly roll on) we only offer renewals with a
minimum 6 month period Assured Shorthold Tenancy Agreements". And surprise surprise, they charge £120 for the privileged.

Also they charge a higher amount for referencing if you take the property for a longer period of time. Both of these sound quite dodgy to me.

Are both of these practices standard? And what is the best way to get around them!

Thanks

Comments

  • princeofpounds
    princeofpounds Posts: 10,396 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Letting agents trying to gouge a cheap buck is quite standard yes.

    Re renewals:

    - it is not the LA's decision what tenancies to offer, that is down to the LL. (though some ignorant landlords will delegate decisions to LAs).

    - a periodic tenancy happens automatically by law if you stay in the house one day over the fixed term. There is no choice for LL or LA over this. If they want something different, they have to evict you. Obviously sensible LLs don't do this.

    With LAs like this you have to be careful they aren't dishonest intermediaries. More than once LAs have told LLs that the tenant is leaving, and told tenants the LL wants them out, when both would have been happy to continue the tenancy.

    As for the referencing fees for longer tenancies, this is not normal. Not heard of this practice before. I can only assume they do it because they don't get so many renewal fees.

    Sounds to me like their business model is to appear cheap to the LL on a headline basis and gouge renewal and tenancy fees to top up their earnings.
  • MartynK
    MartynK Posts: 44 Forumite
    Seventh Anniversary Combo Breaker
    I just had that with my new place.

    Bit of a con really considering how much a credit check actually costs but c'est la vie.
    Anyway, yup I believe it is perfectly legal, its how they make money. However the guy who maintains my property for the Landlord said they are likely to want to go into a monthly roll on contract between them cutting out the LA entirely.

    Choice is your really, you could see if you could contact the Landlord of a property and see if they'd entertain such a notion (assuming you all got on well and no issues during your 6-12months) But understandably they may still want to go through a LA to begin with for the added security.
  • tbs624
    tbs624 Posts: 10,816 Forumite
    edited 3 May 2013 pm31 6:29PM
    tmc20 wrote: »
    Hi,

    We're looking a letting a property, and in the LA's application to let it states "Please note we do not offer Periodic Tenancy (monthly roll on) we only offer renewals with a
    minimum 6 month period Assured Shorthold Tenancy Agreements". And surprise surprise, they charge £120 for the privileged.
    As PoP says, a stat periodic tenancy arises automatically if a T stays put after the Fixed Term expiry and no new Fixed Term has been signed up to. However, if a T has been served with a valid S21 (notice of intention to seek repossession) then a LL may head straight to court the day after the FT expiry.

    A LL who has a reliable T in situ, would of course be foolish to take that route and then have to go through the hassle of finding a new T whp may turn out to be a complete PITA, despite referencing etc. Unfortunately, some LAs seek to persuade LLs that this is the way to manage the rental, effectively trying to twist the T's arm into signing for a further FT tenancy. LA gets nice hefty renewals fees from both LL and T plus the security of knowing that they also have the commission for a further set period.

    Anyone can set up in business as an LA - no minimum training qualifications or specific knowledge needed to be able to do so. Some of them have a poor knowledge base and a complete lack of courtesy and/or personal charm.

    Intelligent LLs understand that Ts may happily stay put on a Stat Periodic for a number of years after a FT expiry, if it suits both LL and T. Ts who are pressurised by idiot greedy LAs tend to move on elsewhere or not sign up in the first place. Expensive void period anyone?

    OP - seek out a LL who self manages their property/ies. Check via the local or national LL associations or see if the local Council holds a list of accredited private sector LLs.

    Not excusing LAs hefty fee structures but the increase in fee for a longer initial let may be because there is a greater sum at risk and so the next level of check is undertaken. This may be related to a LL's rent guarantee insurance ( not all LLs use such policies)

    Self managing LLs will still want appropriate 3rd party checks to be made but are more likely to pass only the actual costs rather than wacking on a sizeable profit margin.

    I'd avoid LAs in general and definitely ones that lay out an early objection to Stat Periodics
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Read:

    Ending/Renewing an AST (what happens when the Fixed Term ends?)(What is a Periodic Tenancy?)(How can a LL remove a tenant?)(How can a tenant end a tenancy?)
This discussion has been closed.
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