MSE News: Letting fees ban introduced to Parliament

Comms69

Footos wrote: »

Hi,
Our tenancy renewal is coming up in the next month. Does anyone know if the provisions of the new Bill will apply to existing tenancies?


I'm particularly worried about an additional clause where "Any further extensions or renewals at a later date will also be charged at £XXX".


Thanks

Not within the month. Effective date is likely to be April to coincide with tax period ( at best )

davidmcn

Footos wrote: »

Our tenancy renewal is coming up in the next month. Does anyone know if the provisions of the new Bill will apply to existing tenancies?

I'm particularly worried about an additional clause where "Any further extensions or renewals at a later date will also be charged at £XXX".

The current version of the Bill is here.

My reading of it is yes, it will prohibit fees including renewing existing tenancies which refer to fees e.g. section 1(6)(c) and 2(5)(c) both prohibit fees which are "pursuant to a provision of an agreement with the person relating to such a tenancy which requires or purports to require the person to [make a payment] if the tenancy is varied, assigned, novated or terminated". That's also in line with what happened in Scotland.

However:

(a) the Bill might be amended before it's passed, and
(b) it isn't going to be in force for next month anyway.

Pixie5740

Footos wrote: »

Hi,
Our tenancy renewal is coming up in the next month. Does anyone know if the provisions of the new Bill will apply to existing tenancies?


I'm particularly worried about an additional clause where "Any further extensions or renewals at a later date will also be charged at £XXX".


Thanks

Does it matter? You don't have to sign a new contract every time a fixed term ends. If you want to know why then read the Tenancies in Eng/Wales: Guides for Landlords and Tenants sticky at the top of the board.

Pixie5740

buggy_boy wrote: »

I can see a few problems or unforeseen consequences... Although I totally agree tenant fees are outrageous I think a max fee for new tenancy and renewal that would just reflect the costs, would be better and this is why...

- To stop tenants just applying for multiple properties letting agents have planned to take a deposit, this will not be protected in a scheme and I can see all the problems we had before when it comes to deposits.

- Landlords will be less flexible, letting agents will still charge for renewals but landlords will pick up the bill, expect landlords to reject the tenant only wanting a 6 month renewal

- I recently had a situation when couple renting, they split up, she stayed in property, council wanted tenancy in just her name, to do this obviously there was a fee from letting agent (Needed letting agent because of all the new legislation), tenant paid this fee, if they could not have paid it will cause issues, there was no benefit for me to change the tenancy agreement, it was the council that needed it.

- Limiting deposits will mean it will be more difficult for tenants with bad credit history or those with pets getting a tenancy as landlords cannot get extra deposit to cover the extra risk.

I think this is all about wanting to be seen to be doing something and not really thinking it through and just like the windrush migrants that fell foul or right to rent this will unintentionally hit those that are most vulnerable the hardest.

Why will letting agents still charge for renewals when a periodic tenancy is a perfectly viable option just as it always has been? It's usually the letting agents pushing for the renewal.....I can't think why. Do you think they will still push so hard and threaten tenants with eviction if they can no longer scalp the tenant for the money? How much work is really required to change a date or a name on a tenancy agreement? I understand that you don't just pay what it costs someone to provide a service because they have to make a profit but letting agents operate with huge margins. There is plenty of fat to trim.

How does using a letting agent help you with all the legislation given that letting agents in England require no training, qualifications or licensing?

Pixie5740

PasturesNew wrote: »

The way it used to work for agents' income was that they had enough of a portfolio of properties to generate their income by charging the "10% of the rent" fee from the landlord.

These days, "everybody" became an agent and they have few properties on their books.

In the olden days you'd go to an agent, who had a lot of property on their books and they'd know what was going on with them all and which might be of interest to you ....

Nowadays 1001 agents each have 1-2 properties they're advertising and it's a pain in the butt calling round lots of different agents to try to get viewings for the one they've got.

If average rent is, say, £1000/month and if an agent takes £100 from that, then they could run their business with that passive income if they had 100 properties (100x£100 = £10,000/month). That's £10k/month for sitting on their bum tickling their admin along. They don't NEED to charge additional fees "to cover their costs" if they're running a viable business.

They all got ridiculously greedy - and once they spotted another agent had invented some "new fangled fees to rip cash from the pockets of tenants", they all added that one to their list.

Tenants used to just go to a viewing, pick a flat, sign the paperwork, hand over their deposit and first month's rent and move in.

I remember the last time I rented somewhere in England and I was charged an admin fee for doing the admin they were already charging me for such as a fee to print the tenancy agreement, a fee to give me the keys, a fee to reference me, a fee to hold the property and stop further viewings even though I know for a fact they let other people view the room after I had paid the holding fee (no deposit but another fee). Even !!!! Turpin had the decency to wear a mask.

jonnygee2

Totally agree with this ban.

Eventually any extra fees charged to the Landlord could just be charged to the tenants via rent. However, this is still a lot better because letting agents have to be reasonable with so competition will play its proper part in keeping these fees to a minimum.

The last time I tried to rent a property (about three years ago) I was told I had to pay a £25 fee to make an offer on a property that I liked (but was clearly overpriced). And one letting agent even tried to charge for a 'viewing service' by which he meant he would let me see the property I 'might' want to rent.

This is obviously the lowest end of the letting agent spectrum (East London!) and I didn't go near them, but still some legislation is necessary.