A tenant who was billed £411 for finding her replacement by LudlowThompson has challenged the lettings agency for making unreasonable demands.

Matt Quinton says after his partner disputed the charge and then complained to the Property Ombudsman, LudlowThompson first offered a refund of £333 but then asked them to sign a non-disclosure agreement, promising not to tell anyone about the deal and to inform the Ombudsman that it had resolved the complaint amicably.

Quinton told the Mail Online that his partner moved out of the two-bedroom flat in Tooting (pictured), but as she was part-way through her contract, needed to novate her tenancy — find someone to take over the remaining term in her place — which she did.

She was billed £411 by LudlowThompson, including a charge of £229 for the creation of a new tenancy agreement, as well as inspection and deposit registration fees.

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A LudlowThompson spokesman told LandlordZONE: “It is only the landlord’s reasonable costs that we seek to recoup from the tenant, for example the cost of signing up a new tenancy agreement.

“These costs are only charged where the tenant seeks to end their tenancy contract early. Most people would agree that it would not be fair for the landlord to bear the costs created by an early end to the tenancy.”

Quinton said the Act, which went live in full last May, states that fees for a novation must be capped at £50 or cover reasonable costs. He added: “Before the fees crackdown, the firm charged £432 for a novation. Surely the landmark legislation should have achieved more than a £20 reduction?”

Since the law changed a year ago, the Property Ombudsman has registered 207 complaints over unlawful fees — and has so far supported 58 of them while 61 were resolved.

A spokeswoman tells LandlordZONE: “We would strongly urge tenants who find themselves in this position to think carefully about agreeing to anything and to consider raising a formal complaint with the agent, with a view to escalating the issue with the agent’s redress scheme and trading standards.”

5 COMMENTS

  1. On this occassion, I think the Letting Agent is correct.

    IF the Tenant had stayed full-term, the Landlord would have paid – out of his/her pocket – one set of referencing fees, one AST, one deposit registration, one inventory in, one inventory out plus one set of departure paperwork.

    WHY should the Landlord have to pay for it all again just because a Tenant wants to escape his/her contract early?

    Of course, if the Letting Agency were not upfront about the charges and/or failed to display them, then that’s a whole different issue and the Tenant should not have to pay them.

  2. hardly a loophole. Just trying to get their costs covered that were caused by the tenant breaking the terms of the contract by the sound of it.

  3. Alternatively, the landlord could of stuck to the contract and insist the tenant either see it out, or buy out the remaining term. Sounds like the tenant got a good deal, but surely they cannot expect the landlord to pay the costs incurred in the landlord ‘helping’ them get out of the remaining term of THEIR contract. Complete Joke, and goes to show how badly Landlords are treated and looked upon by society in general. I don’t know many industries, where the person supplying a service to society is viewed in such distaste. The media don’t help either, any opportunity to put the boot in is siezed upon. Fairness in the general public / tenant / media view is that the landlord gets the stuffing kicked out of them, and everything goes against them.

  4. How does this help future tenants? If a tenant wants to break out of a tenancy agreement, the landlord / agent will say no. Pay until the end of the tenancy.

    A lot of tenants don’t know how much paperwork in involved….

    When I set up a tenancy, there is a huge bundle of document / procedures e.g. tenant referencing, produce new contract (two copies), right to rent check, print how to rent guide, EPC, take utility readings (visit property), check smoke alarm (visit property), EPC, payment information, gas safety check, electric check, property check-in, inform utility companies etc…. When a tenant moves in, I explain everything about how the boiler works, washing machine, fire exit etc…. and go through everything.

  5. The Tenant Fees Act does indeed restrict the costs of dealing with a novation to the greater of—
    (a) £50, or
    (b) the reasonable costs of the person to whom the payment is to be
    made in respect of the variation, assignment or novation of the tenancy

    What are reasonable costs? There can be disagreement but the problem is that if it is later found that the amount demand of the tenant was even one penny more than it should have been the landlord or agent has taken a “prohibited payment” and is liable for a fine of up to £5000 for the first offence. Even if the excess is paid back immediately that is no defence though councils probably won’t pursue in such cases.

    If a tenant agrees to a figure and then as soon as they are released from the tenancy challenges the figure, it is a one way bet. The best case for the landlord/agent is that they spend hours of time dealing with the matter and are able to keep the agreed fee. The worst case is that they spend hours of time dealing with the matter and have to return some of the agreed fee and are then fined and named and shamed. The tenant has no down side, no risk of costs.

    The obvious answer for landlords is to be aware of the risks. It will be no surprise if, with cases like this, many landlords and agents adopt a policy that they will never under any circumstances help a tenant by agreeing to end a tenancy early.

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