PDA

View Full Version : Tenancy Renewal Charges Again



Goyambokka
17-03-2007, 14:04 PM
I've read all the threads (I think!) on this old chestnut, but it seems that nothing has changed or is changing.
I am a landlord holding out against the letting agent's charges of 8% of the annual rent (over £1000 + VAT, in this case) to renew the tenancy. I've used every argument against them..not needed as will become 'periodic' tenancy.. unfair clause..money for nothing etc. etc., but they will not budge except to reduce the percentage to 7% saying that I signed up to the terms (which I did).
I've contacted Office of Fair Trading and they were unhelpful, telling me to contact ARLA, but I'd have to pay to join them and they probably can't help anyway. I've also been in touch with the local trading standards officer who thinks this is unfair, but that it is an issue between traders (I think Esio Trot pointed this out on a previous thread) and suggested a solicitor. He also asked about ways of bypassing this (again discussed on the thread by gingerlion and others).
I'm pretty sure I'm going to have to capitulate as I now have two weeks to pay before they start to fine me, but it is unfair practice.
Has anyone else any more up to date information or ideas or dodges? Anything gratefully received.

rewop46
17-03-2007, 14:33 PM
We have removed all our properties from all of the agents we were using and now manage them ourselves plus other disgruntled landlords.

We have had a monumental battle with some of them and are winning.

Just because you have signed a document it doesn't necessary mean that the terms and conditions are binding. Look at the current bank charges situation; they have to be reasonable.

You can write to ARLA and complain about the agent if they belong to them. Remember though, they are there to represent the agent's interest as he pays the membership.

The terms and conditions are designed to prevent you from ever moving to another agent - sorry letting agents on this forum - the best time is when the current tenant leaves.

I've no doubt you are going to receive a mountain of advice on this one.

rewop

Joannepowell
17-03-2007, 14:33 PM
I've read all the threads (I think!) on this old chestnut, but it seems that nothing has changed or is changing.
I am a landlord holding out against the letting agent's charges of 8% of the annual rent (over £1000 + VAT, in this case) to renew the tenancy. I've used every argument against them..not needed as will become 'periodic' tenancy.. unfair clause..money for nothing etc. etc., but they will not budge except to reduce the percentage to 7% saying that I signed up to the terms (which I did).
I've contacted Office of Fair Trading and they were unhelpful, telling me to contact ARLA, but I'd have to pay to join them and they probably can't help anyway. I've also been in touch with the local trading standards officer who thinks this is unfair, but that it is an issue between traders (I think Esio Trot pointed this out on a previous thread) and suggested a solicitor. He also asked about ways of bypassing this (again discussed on the thread by gingerlion and others).


I'm pretty sure I'm going to have to capitulate as I now have two weeks to pay before they start to fine me, but it is unfair practice.
Has anyone else any more up to date information or ideas or dodges? Anything gratefully received.

Hi there

I don't actually use agents so have not had to deal with such an issue.

Would the simple answer not be to just change agents?

Kind Regards

J

Goyambokka
17-03-2007, 15:20 PM
Thanks both.
I haven't used the agents since they set up the tenancy and I also manage the tenants myself. However, the agents have a clause in their Terms and Conditions that enables them to charge for Tenancy Renewal even if neither I nor my tenants want it.
You are right to say it is like unfair Bank Charges, but I guess in these LL cases it affects a smaller number of people and so the impetus for change is weaker.

Joannepowell
17-03-2007, 15:38 PM
How spooky is that rewop? We both replied at exactly the same time. :eek:

Just a thought Goyambokka but couldn't your tenant give notice to the agent in question as if he was leaving and then sign up to a new tenancy agreement with you the minute his notice expires with the agent? Landlord could say he is dealing with his own tenancy from then on in. Could that work?

J

rewop46
17-03-2007, 16:22 PM
Thanks both.
I haven't used the agents since they set up the tenancy and I also manage the tenants myself. However, the agents have a clause in their Terms and Conditions that enables them to charge for Tenancy Renewal even if neither I nor my tenants want it.
You are right to say it is like unfair Bank Charges, but I guess in these LL cases it affects a smaller number of people and so the impetus for change is weaker.


I didn't realise that you managed them yourself. We use agents on a let only basis for ourselves and our clients; they send these renewal notices out as a matter of course. We don't charge for this; after all it's just a matter of getting a few signatures on a standard issue contract.

Don't worry about it; tell them to go f:pck themselves and don't use them again. Go on places like this and tell every else not to use them.

I once went into a letting agent who tried to stitch me up and photographed the boards with all addresses of the properties they managed. They sh1t themselves. They paid me my money pretty quick after that because they new what I would do with the information.

rewop

settloe_99
17-03-2007, 17:24 PM
I have to agree with the other posters. I wouldn't bother renewing your agreement with your tenants and tell the agent that you won't be using them again.

I really can't see the agent taking you to court over it!

attilathelandlord
17-03-2007, 17:33 PM
They can and almost certainly will take you to court if you don't pay them.

If you allow the tenancy to become periodic then tell them you will be paying the fee monthly.

But in the end you signed a contract which allowed them to make the charge, you didn't negotiate a one-off fee, no doubt you didn't read the small print.

You have to pay, it's as simple as that. Next time check what you are signing!

settloe_99
17-03-2007, 17:40 PM
They can and almost certainly will take you to court if you don't pay them.

If you allow the tenancy to become periodic then tell them you will be paying the fee monthly.

But in the end you signed a contract which allowed them to make the charge, you didn't negotiate a one-off fee, no doubt you didn't read the small print.

You have to pay, it's as simple as that. Next time check what you are signing!

I have to disagree. There is so much on this website about how no matter what you sign it isn't necessarily binding if it is deemed "unfair".

lorenzo
17-03-2007, 17:49 PM
As it falls under normal contract law, rather than consumer contract law, I doubt you could play the unfair terms card. You have made a contract with them under the term.

But it just seems like bad business to me FWIW.

A sure way to encourage LL's to walk.

As an aside; what a lark! most agents don't even get that for full management here... and on lower levels of rent.

How does one become a letting agent again?

attilathelandlord
17-03-2007, 17:51 PM
It is your prerogative, but "unfairness" is one thing, signing things you don't read and later disagree with is another.

There is nothing unfair in the term, it's just that having now to keep up their end of the bargain, the OP doesn't like it.

The law is not there to unmake bad bargains, the OP didn't have to go with that agency and sign their terms and conditions. Unfairness is tested in court.

What will the OP say to the judge when he asks why they agreed to such a term and signed to show assent and now no longer wish to honour the bargain made?

As ususal, it's a case of landlords spending more time with their holiday brochures than the legal aspects of what they are signing up for.

Goyambokka
17-03-2007, 18:41 PM
Yes, of course, I signed it, but that still doesn't make it fair does it?
Yes, I do want to get out of it, but I know it's very likely that I will have to pay.
Making assumptions about what I do or don't read, without knowing me, or the circumstances under which I signed, is less than helpful.
What I am interested in, above and beyond my own personal gripe, is any up to date information or ideas about tackling this unfair practice. Has the OFT made any recent moves. So many LLs abroad, or without the benefit of this site, don't question agent's charges.
Anyway, thanks to all of you for your input. I'm grateful.

settloe_99
17-03-2007, 20:36 PM
I am a landlord holding out against the letting agent's charges of 8% of the annual rent (over £1000 + VAT, in this case) to renew the tenancy.

Having just read the post again, am I seeing things??? A landlord is charged £1000 + VAT for an agent to sign a piece of paper which is most likely word processed. We charge landlords £45 + VAT only IF they insist on us entering in to a new agreement.

Goyambokka
17-03-2007, 21:06 PM
No, you read it correctly. Amazing isn't it? Of course the agents are in thatlondon.

attilathelandlord
18-03-2007, 07:49 AM
If it was so unfair,why did you sign the agreement in the first place?

I'm not making assumptions, you signed something, now you have to honour it.

The way to escape these terms is not to sign in the first place.

I'd have some sympathy if they were trying to impose this if it weren't in the contract, but you signed for it it and now you want to dishonour the agreement. If anyone is being unfair it's you!

Think of it this way. If your tenants left and the property was empty for a month you would lose around £1000 and then possibly have £1000 agents fees on top. Think of it as a business cost to have tenants that someone else put the work into to find continously in the property is going to cost you £1000 rather than £2000.

IF YOU AREN'T PREPARED TO PAY THE COST OF DOING BUSINESS THEN DON'T DO THE BUSINESS IN THE FIRST PLACE.

I'm not totally unsympathetic, I got caught like this the first time I used agents many years ago and now I know to pay a ONE OFF finders fee and NOTHING ELSE. In my case also, it wasn't the agent being unfair , it was me being naive, same as you.

Goyambokka
18-03-2007, 10:34 AM
Attila, I don't mind (much) you pointing out my stupidity, but I do mind (a little) you making the assumption that I read travel brochures, rather than an agent's terms and conditions.
I think there are two strands here: I can only agree with you that if I signed, I am responsible for the consequences, but, on the other hand, surely charging a month's rent to do some unnecessary work is rather steep?
I take your point about the cost of losing the tenants, but, in this case, my tenants want to stay.
Are we allowed to mention names?
Perhaps the agents think the initial fee I paid them to set up the tenancy was not enough. In that case they should increase their fees rather than employ what (to me) seems like an underhand tactic.
Like you, I will never make that mistake again, but, the very fact that you have found a way of avoiding those renewal payments, leads me to believe that you do think they are unfair.
Anyway, I do appreciate your thoughts and ideas. Thanks.

attilathelandlord
18-03-2007, 11:18 AM
I mean the reading of brochures as an illustrative measure, most people don't read what they are signing and I spend a lot of my working day trying to advise people who have done that very thing!

It's just a human nature thing and I am very much for people taking control of their own reality rather than going around doing silly things and then complaining about how unfair it all is.

I know because I've done all those silly things in the past and had people tell me to show up in my own reality and get a grip. I hated it but they were right!

The costs are not unfair as such, they are merely a cost I refuse to undertake any more!

Funnily enough there is a Rosie Millard article on this very subject in the Sunday Times Homes supplement. Get it as it makes illuminating reading.

Stel
19-03-2007, 10:00 AM
If I understand this properly you paid the agents a fee at the start of the tenancy and no longer pay them monthly for any service?
If that is the case the only "service " they can provide in renewing the contract would be to produce new copies with new dates and as such the fee they want is clearly unfair. I should think the fact that the banks have never gone to court in the dispute about a charge having to be a reflection of the cost of the work is clear indication that the agents are very unlikely to do so.
If both yourself and YOUR tenant want to continue on a periodic basis then you do require the service of the agency plain and simple.
It may be that you or the tenant do not want to commit to another fixed term?? as you were thinking of selling or the tenant is thinking of buying.
In which case Im sure the agent has another unfair and unenforcable term saying that he must also be paid a fee for selling the property!!!
Dont be bullied these guys rely on taking advantage of the inexperienced and uninformed and in my experience swiftly give up if you are firm and stick to your guns.

Stel
19-03-2007, 10:02 AM
Sorry typo meant do not require the service of the agent!!!

rewop46
19-03-2007, 12:17 PM
I believe some of the more learned members here are firmly on the side of the agent here and are adament that you are fully committed to anything you sign. That's crap!

I originally advised you to tell the agents to get f:pcked. That was metaphorical not literal.

Stel has come in here and said that they may well back down if you push it. Thank you Stel.

If you are not to be a victim of all the people in this business who are ripping you off then you must learn to fight. Of course, the most valuable advice in this thread is to not get caught in the first place - easy in theory, hard in practice.

Every time you come across a situation like this, push a little bit harder. Be careful though, one CCJ will bugger up your credit rating, this is of paramount importance to you.

You may lose this one but try writing to them, be a nuiscence, string it out. Be careful to make sure that you are not abusive, if it ever comes to court then ALL correspondance is presented to the judge.

Arbitrators usually like to see that both sides have exhausted all avenues so don't be put of by an immediate threat of legal action. Stand your ground.

rewop

Goyambokka
19-03-2007, 12:42 PM
Thanks so much for your support Stel and Rewop. It is probable that I will have to pay or risk added fines and/or court.
However, I am not giving up and am continuing to fight back over the charge through every agency I can think of. At present sending Terms and Conditions to local trading standards officer to check over, writing to agent's complaints department and local MP as starters.
Any other ideas gratefully received!

Joannepowell
19-03-2007, 21:41 PM
Thanks so much for your support Stel and Rewop. It is probable that I will have to pay or risk added fines and/or court.
However, I am not giving up and am continuing to fight back over the charge through every agency I can think of. At present sending Terms and Conditions to local trading standards officer to check over, writing to agent's complaints department and local MP as starters.
Any other ideas gratefully received!


What about the press Goyambokka? You could highlight the dangers of signing agent contracts without realising the consequences IE. extortionate tenancy renewal fees 12mths down the line etc etc. Might be worth a try....

J

rewop46
20-03-2007, 05:32 AM
What about the press Goyambokka? You could highlight the dangers of signing agent contracts without realising the consequences IE. extortionate tenancy renewal fees 12mths down the line etc etc. Might be worth a try....

J

Goyambokka One thing you haven't done here is name them. I've done this in the past in situations like this and been threatened with legal action. As I am unsure of the law covering this I have removed it. I now just suggest in some way so that the reader can work it out for themselves.

I'd love to have a few opinions on this.

For example, if I just quoted word for word a clause from an agents terms and conditions, with no adverse comment, would this be legal?

rewop

Goyambokka
20-03-2007, 07:48 AM
Yes, Joanne, good idea. I'll save it for later down the line.
I wasn't sure if I was allowed to name them and perhaps I won't at the moment, although why not?

Ericthelobster
22-03-2007, 06:44 AM
Funnily enough there is a Rosie Millard article on this very subject in the Sunday Times Homes supplement. Get it as it makes illuminating reading.I've only just read the above article (Wednesday's normally about the time I get round to finishing the Sunday papers :) ) - for anyone interested, it's here: http://property.timesonline.co.uk/tol/life_and_style/property/article1519374.ece.

What I find quite bizarre is that she doesn't even mention the obvious strategy of dealing with an agent (as a prospective new customer, at least) which is to negotiate a tenant-finding only deal whereby the AST simply rolls on to a periodic tenancy after the end of the fixed term, thereby requiring no further action from the agent in terms of renewal. Sure, many may turn that down, but Millard doesn't even mention it.

Almost as if the Sunday Times' BTL expert has never heard of periodic tenancies. Surely not?

Goyambokka
22-03-2007, 07:45 AM
Oh, thanks for that link Eric. I looked and looked for the article Attila mentioned but couldn't find it.
It confirms my research (ringing letting agents in N London and asking their terms). When I suggest that the charge is rather steep for a renewal, they all talked about rent rises which would cover it...
In fact I discovered that my agents are slightly cheaper than most of the ones I rang!
I am now dealing with the complaints department.
Is there a downside for tenants with a periodic tenancy in that the LL can give 2 months notice , but with a year's AST they have more security? I may have misunderstood this.

I do agree with you that there appears to be ignorance, or silence, over a periodic tenancy. When I mentioned it, the agents talked even faster, I noticed, in a 'blind me with science' way.

samantha1609
22-03-2007, 14:53 PM
Periodic tenancies potentially lack security for both the landlord and tenant. However, it is always worthwhile talking to your tenants to ask if they are planning on moving in the near future (obviously, its not a signature on a contract, but will at least give some indication as to their future plans).

I may be a little backward, not being a London agent, but, we don't charge renewal fees for a periodic tenancy!!?

DianeB
22-03-2007, 15:07 PM
Samantha, my agent doesn't either. I pay approx £400 set up fee which includes reference checks and rent guarantee and on top of that I pay 8% monthly management fee. All subject to VAT.

samantha1609
22-03-2007, 15:26 PM
We charge £125 for set up, 12.5% for full management (plus VAT), however, this does not include rent guarantee, although we can organise it.

Tenant finds are £395+VAT,

How does that compare to what others are paying?

I don't expect figures, just a more or less than guide! :)