Early Surrender Costs - Tenancy Fees

jtedfelt

Hi guys

I'd be very grateful for receiving help on a difficult situation in regards to ending a tenancy agreement early.

Me and my ex girlfriend signed a 18 month tenancy agreement back in October last year. We sadly decided to split up a month ago and no one of us can afford staying in the property alone.

Luckily, the landlord agreed that we could surrender early if we found a new tenant, which we did. He's moving in by end of June.

Going through our contract, I noticed that we have to bear a number of costs for surrendering early, including:

- Pay for the letting fee of up to 11% from the date of early surrender until the original end date of the Tenancy,

- Various inventory check out costs

- Setting up a new tenancy agreement

- Cleaning cost

I understand that we have to pay for setting up a new contract, inventory check outs etc, but it seems crazy that we'd have to pay the letting fee until March next year if we have found a new replacement, where I presume another tenancy fee will be levied, so agency will earn double letting fees.

Does anyone have any experience dealing with these situations?

Thanks

John

moneysavinghero

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

princeofpounds

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

Not sure how this works under this 'new' regime... but might that not mean they don't want to offer the surrender after all?

user1977

princeofpounds said:

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

Not sure how this works under this 'new' regime... but might that not mean they don't want to offer the surrender after all?

Pretty muchy. My reading is that they can charge anything they like up to the amount of rent which would have been due for the rest of the term.

SpiderLegs

user1977 said:

princeofpounds said:

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

Not sure how this works under this 'new' regime... but might that not mean they don't want to offer the surrender after all?

Pretty muchy. My reading is that they can charge anything they like up to the amount of rent which would have been due for the rest of the term.

Not if someone else moves in they can’t.

moneysavinghero

princeofpounds said:

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

Not sure how this works under this 'new' regime... but might that not mean they don't want to offer the surrender after all?

It should not make any difference to them. If they are only claiming costs actually incurred by the surrender then the total amount they have in their mitts should be exactly the same. Of course this depends on them respecting the law. They may decide they will ignore the law and decide to only let a tenant surrender if they can make more money than they would if they made the tenant serve out his contract.

GDB2222

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

You mean 2019.

The relevant bit is in Schedule 1:

Payment on termination of a tenancy

7(1)A payment is a permitted payment if it is a payment to a landlord in consideration of the termination of a tenancy at the tenant’s request—

(a)in the case of a fixed term tenancy, before the end of the term, or

(b)in the case of a periodic tenancy, without the tenant giving the period of notice required under the tenancy agreement or by virtue of any rule of law.

(2)But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment.

(3)A payment is a permitted payment if it is a payment to a letting agent in consideration of arranging the termination of a tenancy at the tenant’s request—

(a)in the case of a fixed term tenancy, before the end of the term, or

(b)in the case of a periodic tenancy, without the tenant giving the period of notice required under the tenancy agreement or by virtue of any rule of law.

(4)But if the amount of the payment exceeds the reasonable costs of the letting agent in respect of the termination of the tenancy, the amount of the excess is a prohibited payment.

(5)In this paragraph “fixed term tenancy” means any tenancy other than a periodic tenancy."

princeofpounds

moneysavinghero said:

princeofpounds said:

moneysavinghero said:

Under the Tenant Fees Act 2009 they are not allowed to charge you more than the actual costs they have incurred as a result of the surrender. So yes i would question them if they tried to charge you for the letting fees. Would also question them on the cleaning cost.

Not sure how this works under this 'new' regime... but might that not mean they don't want to offer the surrender after all?

It should not make any difference to them. If they are only claiming costs actually incurred by the surrender then the total amount they have in their mitts should be exactly the same. Of course this depends on them respecting the law. They may decide they will ignore the law and decide to only let a tenant surrender if they can make more money than they would if they made the tenant serve out his contract.

I appreciate that. But if there is no incentive, why bother with all the paperwork? Just hold the current tenants to their contract.

And yes, I know that there is a risk that the current tenants will become a non-payment risk if they become delinquent as a result of whatever situation they are in that requires early surrender. 

But it just seems a bit weird to remove any legal possibility of an incentive to do something that is, ultimately, entirely voluntary.

Gavin83

jtedfelt said:

Hi guys

I'd be very grateful for receiving help on a difficult situation in regards to ending a tenancy agreement early.

Me and my ex girlfriend signed a 18 month tenancy agreement back in October last year. We sadly decided to split up a month ago and no one of us can afford staying in the property alone.

Luckily, the landlord agreed that we could surrender early if we found a new tenant, which we did. He's moving in by end of June.

Going through our contract, I noticed that we have to bear a number of costs for surrendering early, including:

- Pay for the letting fee of up to 11% from the date of early surrender until the original end date of the Tenancy,

- Various inventory check out costs

- Setting up a new tenancy agreement

- Cleaning cost

I understand that we have to pay for setting up a new contract, inventory check outs etc, but it seems crazy that we'd have to pay the letting fee until March next year if we have found a new replacement, where I presume another tenancy fee will be levied, so agency will earn double letting fees.

Does anyone have any experience dealing with these situations?

Thanks

John

Has your landlord actually said they're charging you this or is it just something you've read in your contract? Did you not agree what the costs would be before going through the process?

Ultimately a lot will depend on what's in the landlords contract with the letting agent as well. As this is a business to business contract it doesn't have to be as 'fair' as a consumer contract and it may well include a clause that says the landlord is liable for the fees, even if a new tenant is found. If that's the case I can't see why you aren't liable. However I agree with some of the others, the landlord shouldn't benefit from this situation.

jtedfelt

Thanks for all the input so far - this has been very helpful.

I've received two recent emails from my landlord in regards to "costs of surrendering your lease early", which seem fairly positive (but also a bit confusing). 

In the first email, they say they want us to pay 50% of setting up a new contract fee, reference check, deposit fee protection for a total of ca £150 and that this a a minor portion of overall costs. That's extremely reasonable.

In the second email, they first state "what you need to pay to the real estate agency is rent only" until the moving out date. However, they then mention that they "feel"  the real estate agency "may try to charge you their fee on a theoretical future rent calculated after moving out date". This is very confusing to me.

Does that perhaps mean that the real estate agency could levy a separate moving out fee to us in order to release us from the contract (incl. the 11% tenancy fee until the end of original contract)?

Thanks