Tenancy Renewal

[ShelleyB]

Our annual tenancy agreement is up for renewal in a few weeks, and the agents have already been on the case by sending us a letter asking if we were going to be renewing it.

Stupidly I didn't read the small print on the agreement and notice that a 5% charge is due upon renewal. I was under the impression that an agent only charged a one off fee for finding a tenant and that was it - I had no idea that they recharged for renewing an agreement, with or without finding a new tenant.

I feel this is a complete rip off, as they have done absolutely nothing for this payment. I was decidely unimpressed with their level of service when finding our tenants, but thought as it was a one off it wasn't worth saying anything, and just getting on with it.

Our tenants are great and want to stay long term, they are more than happy to sign an agreement directly with us. In light that the agent failed to mention this 'renewal fee', and how dissatisfied I was with their service, do I have a leg to stand on if I refuse to pay? And could anyone give me some advice if they have gone their own way too and refused to pay?

Thanks

[Trenners]

Hi Shelley,

This is always a tricky problem to answer as you almost certainly signed a binding contract with the Letting Agent in the beginning (when the property was empty and tenantless) agreeing to the 5% renewal fee.

If you signed a binding agreement then, even though the agent hasn't done anything to earn the 5% this time around, in law it is probably a fee that is payable. Other legal experts on the forum might have some more comments on this. Some might argue that these terms are "unfair" - but, as I say, you signed them when your property was empty.

If the letting agent is not performing a good service then you should terminate your contract with them and use another agent in the future.

If, during this termination process, the letting agent asks you to pay them the 5% renewal fee for the current tenancy - my advice would be to pay it to get rid of them. After all, the letting agent has found you good, long term, tenants who pay their rent on time and look after your property. It might cost you 5% today ... but you are going to save hundreds of pounds in the future.

The most important thing, in all of this, is not to upset the tenants as you negotiate / argue / fight the letting agent. The last thing you want is for your tenants to get caught in the "cross-fire" and not renew their agreement thereby incurring a void period (whilst you look for another tenant) and more letting agents fees as well.

Good luck,

Mark

[GPEL]

If you signed an agreement with the agent, and there was an exchange of mirror-image contracts, it's a lawful contract whether or not you read the details. If they have negotiated a new fixed period with the tenant they have most certainly performed a useful function for you. However, if the charge relates to just letting the tenancy go periodic, involving no activity, you may have a case for claiming it's unfair but would need to contest it through the correct channels. As Trenners advises, move agents if it's cost-effective to do so but keep the tenants happy.

[ShelleyB]

Thanks for your advice, you've confirmed what I thought.

This is so unjust, I'm more than happy to pay for a service, but to pay 5% for a telephone call to me asking if the tenant is staying is daylight robbery. We've negotiated with the tenant and dealt with any issues, so they have no played absolutely no part in any negotiations.

I appreciate your comment that they have found reliable and honest tenants for us, and that is definitely worth paying a fee for. But I feel that I've already paid for that service, and we have kept our tenants happy ourselves, so why pay again - it's not as if they've had to find us new tenants?