Periodic Renewal Clause

Renterturnbuyer

Thank you buggy_boy, G_M, theartfullodger (great name!), Lokolo and Comms69 for your thoughts, it's been useful seeing the logic on both points of view.

I would like to ignore the letter/request for payment completely but I am concerned as I can't find any concrete legislation that this explicit clause is an unfair term.
I would not put it past the letting agent to lie to the landlord that we are at risk of not paying rent (despite always paying early & in full, whilst keeping the property in excellent condition) and encourage them to issue a S21 and find new tenants, as properties in this area rarely last more than 2-5 days post-advertisement.

Is anyone aware of legislation/guidance which refers to effort having to be expended to be able to charge a fee for a service?
I have searched online but couldn't find anything which was clear enough for a layman. I would feel a lot more comfortable with this knowledge (if it exists).

buggy_boy

Renterturnbuyer wrote: »

Thank you buggy_boy, G_M, theartfullodger (great name!), Lokolo and Comms69 for your thoughts, it's been useful seeing the logic on both points of view.

I would like to ignore the letter/request for payment completely but I am concerned as I can't find any concrete legislation that this explicit clause is an unfair term.
I would not put it past the letting agent to lie to the landlord that we are at risk of not paying rent (despite always paying early & in full, whilst keeping the property in excellent condition) and encourage them to issue a S21 and find new tenants, as properties in this area rarely last more than 2-5 days post-advertisement.

Is anyone aware of legislation/guidance which refers to effort having to be expended to be able to charge a fee for a service?
I have searched online but couldn't find anything which was clear enough for a layman. I would feel a lot more comfortable with this knowledge (if it exists).

There is nothing in law that states any effort is needed to charge a fee, in London it is common place for letting agents to charge landlords a yearly tenant find fee, even if the tenant is the same tenant so they have not actually done anything.

Thankfully the law has now changed however unfortunately because your tenancy was started before the change it is still a lawful charge. For the sake of £125 is it really worth the fight? The letting agent could hand the debt to a debt collection agency which could massively increase the amount owed and could affect your credit rating which could have an affect on your ability to get a mortgage.

It's up to you, I'm not sure what the deposit protection scheme would do, they may side with the letting agent, they could say the money owed is missing rent or they may say that it is outside of the scope of the deposit protection scheme, either way even if they refuse to pay out that is unlikely to be the end of it.

Personally given the amount and the potential downsides I would not risk it, there is a lot of keyboard vigilante warriors on forums suggesting things like ignoring parking fines because they are aimed at the owner where as the driver was the offender... Sometimes it works but a lot of the time it does not, in life you have to chose your battles, if you feel that strongly about it and know the risks and are happy to take those risks then go for it.

Just for clarification those risks could be:
- Eviction
- increased charges via debt collection
- damage to credit rating (Meaning getting a mortgage or renting another property difficult)
- Landlord could be very difficult harsh on end of tenancy checkout and you could end up with another fight on your hands
- CCJ if you fight it in court along with costs awarded against you

If you still want to fight it I suggest you go talk to the Citizens Advise Bureau as they will provide you with much better more impartial advice..

theartfullodger

Buggyboi I'm confident you are wrong.


What legal training & qualifications do you have, please? - In landlord/tenant matters.

Slithery

buggy_boy wrote: »

.....

Nope, in this situation a periodic tenancy is the legal outcome. They aren't allowed to charge for something which is defined by a legal statute.

G_M

Renterturnbuyer wrote: »

I would like to ignore the letter/request for payment completely but I am concerned as I can't find any concrete legislation that this explicit clause is an unfair term.
You won't. Parliament has better things to do (Brexit anyone?) than pass laws specifying each and every possible contract clause and whether it is fair or not!

This is covered by contract law, not leglislation. You'd need to trawl back through 300 years of history of decisions by judges in higher courts to identify 'precedents' ie decisions in similar cases. I'm afraid my time is too valuable to undertake the 3 year training required (law degree) at present.......

I would not put it past the letting agent to lie to the landlord that we are at risk of not paying rent (despite always paying early & in full, whilst keeping the property in excellent condition) and encourage them to issue a S21 and find new tenants, as properties in this area rarely last more than 2-5 days post-advertisement.
Then speak toyour landlord. Is he in the UK? Do you have contact details? You can insist the agent gives you his address see Landlord & Tenant Act 1985 S1.

Is anyone aware of legislation/guidance which refers to effort having to be expended to be able to charge a fee for a service? Yes. Tenancy Fees Act 2019 - but it does not apply to you till 2020.

The reason buggy_boy and artful/myself disagree is that there is no definitive leglislation. We are each putting foward our opinions of what we believe would happen if this clause was put to the test in arbitration or a court.

As I assume neither of them is a judge (& I'm not) we cannot state with 100% certainty what the decision would be - we can only rely on our respective experience. Indeed, even if one of us were a judge, we could not state with 100% certainty how a different judge would rule!

However, I am confidant in my view. And as I said, if you follow my advice (do nothing, say nothing, sign nothing, pay nothing) the worst that could happen if I'm wrong is that you pay the fee later.

So what do you lose?

As for buggy_boys' risks, these are scare-mongering (for reasons I don't understand):

Just for clarification those risks could be:
- Eviction LL would have to use S8 G12 breach of contract. Possession is at the discretion of the court. Courts dislike granting possession orders and making tenants homeless unless there is compelling reason. £125 for an unjustified fee is not a compelling reason.
- increased charges via debt collection would only apply if court ruled in favour of the LL
- damage to credit rating (Meaning getting a mortgage or renting another property difficult) would only apply if court ruled tenant must pay, AND the tenant still refused to pay!
- Landlord could be very difficult harsh on end of tenancy checkout and you could end up with another fight on your hands Thankfully (I don't speak as a tenant) the deposit scheme leglislation was introduced to provide protection against exactly this
- CCJ if you fight it in court along with costs awarded against you

As above. would only apply if court ruled tenant must pay, AND the tenant still refused to pay!

Edit:
Despite my prolonged response above, slithery's post before mine is much more succinct, accurate, and to the point!

Slithery

G_M wrote: »

Edit: Despite my prolonged response above, slithery's[sic] post before mine is much more succinct, accurate, and to the point!

Thanks, was going to say the same about yours...

I'm very logical, but terribly bad at constructing sentences with more than a few words in them (I just can't do emotions)

G_M

Slithery wrote: »

Nope, in this situation a periodic tenancy is the legal outcome. They aren't allowed to charge for something which is defined by a legal statute.

Trying to think of a parallel example, I was minded of this thread here - adapted.

* Private road eg new estate
* The road in front of each house is owned by/falls within the boundary of, each property.
* The road is then 'adopted' by the Local Authority
* road remains in ownership of each respective property, but is now public highway
* owner of house number 4 decides to levy a fee on every car driver who drives on 'his' bit of road.

There's no leglislation saying this is an unfair fee, but the law designating the road as public highway means drivers would not need to pay the fee.

There's no leglislation saying the fee for creating a periodic tenancy is an unfair fee, but the Housing Act designating the tenancy as periodic means tenants would not need to pay the fee.


(now waits to hear how this is comparing apples with pears.....:rotfl:)

buggy_boy

G_M wrote: »

The reason buggy_boy and artful/myself disagree is that there is no definitive leglislation. We are each putting foward our opinions of what we believe would happen if this clause was put to the test in arbitration or a court.

As I assume neither of them is a judge (& I'm not) we cannot state with 100% certainty what the decision would be - we can only rely on our respective experience. Indeed, even if one of us were a judge, we could not state with 100% certainty how a different judge would rule!

However, I am confidant in my view. And as I said, if you follow my advice (do nothing, say nothing, sign nothing, pay nothing) the worst that could happen if I'm wrong is that you pay the fee later.

So what do you lose?

As for buggy_boys' risks, these are scare-mongering (for reasons I don't understand):

As above. would only apply if court ruled tenant must pay, AND the tenant still refused to pay!

Edit:
Despite my prolonged response above, slithery's post before mine is much more succinct, accurate, and to the point!

I agree there is no definitive answer... I would simply state that if what G_M is true then why out of millions of tenants that have paid these charges in the past has nobody challenged this creating a precedent giving a definitive answer?

As for Scaremongering

- Eviction - You are wrong Section 8 would unlikely be used, more likely section 21 would be issued, Section 8 would rely on a judges decision, section 21 would mean the tenant would not be able to put up a defence so eviction is a possibility.

- Increased charges - Yes it would only apply if a court rules in favour of the letting agent however the point is it is still a risk that could drastically increase the fee

- Damage credit rating - Its still a default on a debt, I will admit im not an expert in this field so you could be right however I know just applying for a credit card or loan can reduce your rating so its not calculated just on court orders not paid.

- The deposit protection scheme is there to arbitrate however as a landlord I know there is always damage that I could claim for however I rarely do if the tenant has been a good tenant as I think if they have been there a while and its only small then I can take the hit, obviously if the tenant was awkward then I would be inclined to be less forgiving.

These are all very real risks, they may be small however my point is do you really want to open yourself up to this for the sake of £125?

You could try not paying it, you could question the payment but ultimately if the estate agent persisted I think I would choose my battles and just pay it. (Im not saying I agree with the fee or think its right but in my opinion its not worth the fight for that amount given the potential risks).

buggy_boy

Slithery wrote: »

Nope, in this situation a periodic tenancy is the legal outcome. They aren't allowed to charge for something which is defined by a legal statute.

I think the argument will be it is an administration charge not a charge to change the tenancy. Even if it was only on their systems.. I agree its a ridiculous charge for what might be 2mins of work or may even be able to be automated. But that is the whole reason these fees were banned.

G_M

In 2009, the OFT got a High Court ruling against Foxtons, that

declared that the terms listed below are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords:

a. ....
b. ....
c. Terms relating to renewal commission, where the tenant remains in occupation, and in some cases an occupant introduced by the tenant, after the initial fixed term where the agent is not asked to provide any additional service.

https://www.property118.com/legality-renewal-fees-periodic-tenancies/


Unfortunately the OFT no longer exists, but the case law does.