Legality of Landlord Admin Fees

Emily2005 · 16 April 2019 at 1:31PM

Hi all,

The landlord has offered to break my AST agreement early - a “surrender” but conditional on some fees.
1. £250 + VAT if I find a replacement tenant
2. £500-600 + VAT if they advertise on my behalf

I have since found a replacement tenant, who have also agreed to cover the £250 + VAT fee on top of their own admin fee.

However, the landlord has rejected this proposition and wants me to pay the 250.

I requested an invoice for this fee but they said they will not issue an invoice for this since it is a goodwill fee. Justification given from them: there is no invoice for monthly rental payments.

Question 1: do businesses have to issue invoices for goods and services charged in the UK, especially if they are to pay VAT to the government on my behalf?

Question 2: is it legal for them to charge fees without official proof as to what it is related to? They have mentioned this fee over email however I am worried they are going to run away with this money. Admin fees relating to a tenancy agreement are usually laid out in the contract signed, so that’s well defined. However, this is more a word of mouth agreement and I don’t trust the agency to honour their duties.

Many thanks in advance for your input.

silvercar · 16 April 2019 at 1:40PM

1. They have to issue you an invoice if they are charging you VAT. If they are VAT registered they have to charge VAT.

2. They can only charge fees that they have told you about in advance.

Are you talking about an agency or a landlord? You mention both in your post. An agency needs to be registered and abide by a code of practice of one of the letting agent professional bodies.

Emily2005 · 16 April 2019 at 1:49PM

Thanks for the quick response.

Apologies - was in reference to the landlord’s agent. Would it then be helpful to report them to the professional body they are a member of?

Regarding your response to 2: I suppose they are able to charge me these fees since they communicated this to me over email. However this fee is not set out in the AST contract.

davidmcn · 16 April 2019 at 2:03PM

silvercar wrote: »

They have to issue you an invoice if they are charging you VAT.

Do you have a cite for this? They have to issue you with a VAT invoice if you are also VAT registered, but I don't think there's a general requirement to issue invoices.

It is just a goodwill arrangement rather than something the landlord is obliged to do, so I think whatever form of paperwork the OP would like is something they'd have to negotiate. But I would have thought it's easy enough to collate suitable evidence of the payment being made and what it was for, even if that isn't an "invoice" as such.

silvercar · 16 April 2019 at 2:03PM

Failing to issue an invoice should be reported to hmrc. VAT fraud is serious.

In the first instance, asking for details of their professional body so that you can query the fee is your first step.

You need to tread carefully as you are the one wanting to get out of the contract.

Obviously something untoward if they won’t accept the fee from the new tenant and insist it come from you. Suggests that they don’t want it on record with the new tenant and they hope you go quietly.

Another option would be to contact the landlord direct.

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Legality of Landlord Admin Fees

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