Tenancy renewal fees - replacing one tenant

Lysimache

Three of us have been sharing a flat in London since last July. One person is leaving but two of us want to stay here and find a new third person for when the first term finishes.

We asked the agency about whether renewal was possible. They have said yes, with a 'market' rent rise of 2.5%, but 'with all parties needing to be Maras referenced again as a new party is joining the collective'. and ' a similar application process to the first application'. Which had some pretty hefty admin fees that we negotiated down and were still high. The contract says we agree £125 for renewal which is steep and as I know, not in any way reflecting what is actually being done (yes, I know we got gouged but they were all at it - it's London!)

I feel they are using the fact that we want to replace one tenant as an excuse to treat it as a new tenancy and recharge us those fees. I can understand the new person needing to pay for the referencing but is there ANY justification or reason for charging those of us staying who did this referencing last year?! And can they say this is not a renewal or extension because of the new person?

They won't tell us the precise costs 'till we confirm'. I would rather know now and see no reason for them not to be given - what unexpected costs would there be even while we don't know who the new tenant is?

We would both really like to stay for various reasons but would prefer not to get totally cheated if possible, and wondering on the best approach. I was thinking it would be reasonable to at least ask for a breakdown at this point, WITHOUT confirming, and perhaps an explanation of why they need to do another credit check on all of us when they presumably would not if we were extending the tenancy with the same 3 people.

Any thoughts? Anyone been in this position?

G_M

From the landlord's point of view, the two of you are known tenants. The risks (eg of arrears, damage etc) are known, so there is no reason to need to reference you again.

Of course, the new 3rd tenant is unknown and therefore IS a risk and needs referencing.

However, from the agents point of view, there is profit to be made by re-referencing, and agents love profit. That's what they are there for.

So the first bit of advice is, talk to the landlord. He employs the agent and can instruct the agent to do, or not do, whatever he wishes. Unfortunately some LLs simply delegate all decisions to the agent. For example if they live overseas, or are complete amateurs who rely on the agent to advise them what to do.

From a legal perspective, you are in a weak position. Changing one of 3 tenants can be done either

1) by ending the tenancy and starting a new one (and the LL/agent can then charge whatever they wish, and deny a new tenancy if the applicants refuse) or

2) By a Deed of Assignment whereby the existing tenancy continues but a new name is asigned in place of an existing name. In this case referencibg the two tenants who are not changing cannot be justified.

Of course, the LL/agent may refuse to Execute such a Deed, and insist on a new tenancy.....

If you cannot negotiate with the LL for whatever reason, then negotiation with the agent is the only option. Suggest a Deed of Variation. Suggest a new tenancy but just referencing the new tenant.

You could always threaten to all leave, resulting in more costs for the landlord (a void with no rent, additional marketing costs etc) but again, if the decision is the agents, not the LL's, they may actually prefer that as they can charge both sides even more.......


Landlord & Tenant Act 1985

1 Disclosure of landlord’s identity.

(1)If the tenant of premises occupied as a dwelling makes a written request for the landlord’s name and address to—

(a)any person who demands, or the last person who received, rent payable under the tenancy, or

(b)any other person for the time being acting as agent for the landlord, in relation to the tenancy,

that person shall supply the tenant with a written statement of the landlord’s name and address within the period of 21 days beginning with the day on which he receives the request.

(2)A person who, without reasonable excuse, fails to comply with subsection (1) commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.

BitterAndTwisted

If all three of you are on a joint-tenancy and you want to create one including a new person then it's a new tenancy requiring a new contract to be drawn up. There is little justification for credit-checking the remaining two people but the agent is exploiting the opportunity you have given them.

I suspect there is likely to be a new check-in inventory undertaken, with its associated charge, and a new deposit to be registered with possibly a new lead-tenant. These entail (a little) work to be done, so it's reasonable to expect to be charged/ripped off for it.

In the olden days, a new person would move in and the landlord or agent not necessarily informed. There is a joint-and several liability for the whole of the rent, so the remaining named tenants would bear a risk that the incoming person wouldn't as they wouldn't have been named on the tenancy.

Only an idiot would enter into a contract without knowing precisely what the charges are going to be, so it's not unreasonable to request their proposed charges IN WRITING. You could decide that if you don't get this as far as they are concerned no-one is moving out now.

Lysimache

BitterAndTwisted wrote: »

I suspect there is likely to be a new check-in inventory undertaken, with its associated charge, and a new deposit to be registered with possibly a new lead-tenant. These entail (a little) work to be done, so it's reasonable to expect to be charged/ripped off for it.

Thanks both! I expect to be ripped off (though don't find it reasonable ) - mind you these guys are steep even by others' standards.

I am going to query the re-referencing though. I don't know if it helps us but I looked at the MARAS form and it says we agree that the information can be accessed in the case of a new tenancy, which to me kind of suggests little need for a new reference check particularly when the people in question have been there paying rent all year. But then that's agents for you - as G_M says, out for profit.

Am definitely going to ask for a breakdown before agreeing to anything. What's the unexpected cost supposed to be for the new tenant before we know who it is, wear and tear from typing out a possibly long name? Stress on the agent having to do extra bulls*t for us and then for the new person?