What do you think - is this tenant fee legal?

muhandis

Out of interest, do you think this fee charged to the tenant would be legal under the new act?

da_rule

Pages 4 & 56 of the guidance (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791273/TFA_Guidance_for_LandlordsAgents.pdf) covers this.

Landlords can charge fee's to determine tenancy agreement early, at the request of the tenant (as long as the tenant is exercising a break clause). The fee should only cover the loss suffered by the landlord. Therefore, if these fees cover that loss then it seems to be lawful.

Wanderingpomm

It’s tenancy fees which are banned. Early termination fees are permitted. However they must try to mitigate losses so you should only be liable for commission until new tenants are found

G_M

As explained above, and in the Gov Guidance Notes

EARLY TERMINATION FEES

Q. Can a landlord or agent charge me if I want to leave a tenancy before the end of my fixed-term or the end of my notice period?

A landlord or agent can require you to make payments in connection with the early termination of the tenancy if you have requested this, but there are restrictions on what can be charged. Generally, the costs charged for early termination must not exceed the loss incurred by the landlord (usually the loss in rent resulting from your decision to leave and/or the costs of re-advertising or referencing), or the reasonable costs to the agent (such as referencing and marketing costs).

(page 71)

saajan_12

The guidance clearly states early termination fees are permitted as long as they reflect the actual loss incurred by the landlord (eg lost rent / agent costs / advertising etc).

However both posters aren't quite correct:

da_rule wrote: »

Landlords can charge fee's to determine tenancy agreement early, at the request of the tenant - correct(as long as the tenant is exercising a break clause)- no, if its exercising a break clause then the tenant can leave for free. The fee is only if the tenant is requesting to terminate outside a provision in the agreement. . The fee should only cover the loss suffered by the landlord. Therefore, if these fees cover that loss then it seems to be lawful.

Wanderingpomm wrote: »

It’s tenancy fees which are banned. Early termination fees are permitted. However they must try to mitigate losses so you should only be liable for commission until new tenants are found- non necessarily, many LAs charge £ per month and expect (per their agreement) £ x 12 for the year to cover the tenancy find fees at the start. As their work doesn't change, they may still charge £ x remaining months to the LL as a one off fee and charge separately for a new tenant monthly. So the £ x remaining months of the first tenant's fixed term is a genuine cost to the LL and thus recoverable in full from the first tenant, regardless of a new tenant being found. The point is the total charged to the first tenant can't exceed the remaining rent until a new tenant is found.