Here is a question to the blog clinic from Trevor who is a tenant:
I’m wondering if it is possible for a letting agent to stipulate to tenants and to landlords that occupancy must be fixed term only?
My current letting agent is being quite aggressive in its pursuit of us signing a new contract. This includes regular phone calls, emails and text messages.
They are also saying that if we don’t sign up then they will start re-marketing the flat.
Our preference would be to go onto a periodic tenancy, but the agent insists that this isn’t possible due to their terms and conditions that ourselves and the landlord signed up to. I don’t know what the landlords preference is.
Is this possible? Is it legal? Is it enforceable?
No, I don’t think they can. It is a tenant’s right to stay on in a property after the fixed term has ended (s5 Housing Act 1988).
Any tenancy agreement term which prohibits this (if it exists, check your tenancy) will almost certainly be considered ‘unfair’ under the Unfair Terms in Consumer Contracts Regulations 1999.
Their actions sound like harassment to me. If they actually start re-marketing the flat then this will definitely be harassment, and you should contact your Local Authority tenancy relations officer and ask them to write to the landlord on your behalf. You may also have a claim for compensation.
The only way that the agents can re-let the flat is after an order for possession has been obtained in the County Court. This would need to be done by the landlord (see here to find out why) and I suspect the landlord knows nothing about this.
The agent’s actions are probably because they want to charge a ‘renewal fee’, which they can’t do if your tenancy just becomes periodic.
If the agents are a member of any regulatory organisation such as ARLA or the Property Ombudsman I suggest you complain to them. You could also tell Shelter to help them with their campaigns.
I think this is a little harsh on letting agents (but I would say that wouldn’t I). We don’t charge renewal fees to tenants and only a modest admin fee to the landlord so our desire to see renewals of fixed term agreements certainly isn’t motivated by money. However, we are firmly of the belief that there is sound commercial logic for landlords not wanting their tenants to go onto a periodic basis. Landlords buy and let property as a commercial venture and like any venture, the more certainty there is in respect of cashflow, the more sustainable that venture will be. Allowing a tenant to go periodic takes that certainty away – if they’re within a fixed term agreement the landlord knows for how long the rents are going to continue to flow, is able to better budget for ongoing maintenance, is able to better mitigate potential void periods, can better ameliorate the costs of any rent guarantee insurance and the list goes on.
You say the tenant has the right to stay on at the property upon expiry of the fixed term. Equally though, the landlord may if they so choose, issue a section 21 should their tenant not be amenable to signing a new fixed term. Ok you may argue that such action would be cutting one’s nose off…..but if the underlying property is eminently lettable and then became available during a peak letting period, this may be preferable to potentially getting the property back on 24th December, say.
As with everything we do, we try to deal with this particular issue with fairness and pragmatism. We will offer a fixed term renewal and if the tenant objects, we’ll discuss their reasoning behind wanting a periodic tenancy. If there is a valid reason i.e their job in the area is ending in the next couple of months, then we will recommend the landlord allows the periodic. As with any tenancy matter, the individual set of circumstances must be properly evaluated and a decision made accordingly.
We hear of instances in Norwich where agents routinely insist on new fixed term agreements on a 6 monthly cycle simply so they can charge fees to both landlord and tenant – clearly they only have their own interests at heart and its no wonder letting agents generally are held in such low esteem with people like this around.
Mike,
I think the difference in this particular case is that the agents insist on a renewal and have it in their terms and conditions of business and possibly the tenancy agreement that both parties must agree to it.
Encouraging renewals is one thing (whether you’re paid for it or not), but institing on renewals is entirely different and deserving of a harsh response.
Jamie,
Yes I agree if its in ToBs which surely would(?) be construed as an unfair term in contract under the 1999 Act. However, why do tenants sign them without reading them and/or understanding them?
Because most people don’t enjoy reading legal documents and would rather not.
That is why we have the Unfair Terms in Consumer Contracts Regulations – which is a Europe wide requirement BTW, so it not just UK consumers!
Another self publicising posting from Mike White.
It doesn’t matter what eithr party’s preference is Mike unless the other party agrees.
The question was can a tenant be forced to take another fixed term.
Simple answer – no!!
Tessa is 100% correct in all she says on this item. Be careful too Mike with retaliatory evictions – issuing a s21 just because the tenant won’t sign up to another fixed term. Like agents fees these are coming increasingly under the spotlight, are they not Tessa?
Thank you Industry Observer. Self Publicising perhaps but I hope my commentary is relevant.
I wasn’t suggesting a tenant can be forced to take a new fixed term, in fact I thought I was simply explaining why a landlord would want one from a commercial perspective. Issuing a section 21 notice in the event of a tenant declining the offer of a new contract is hardly retaliatory, it is simply a judgement call by the landlord to ensure they retain control of their business, should the underlying circumstances dictate the necessity therefor.
Interesting you say, “Be careful too Mike with retaliatory evictions…” I read this as you inferring that we, the agent, are in control of this process and we would issue the section 21 at our own behest. While we would certainly discuss the matter with the landlord and, indeed, offer an opinion, the decision belongs to the landlord. After all, it is they who have the contractual relationship with their tenant, not the agent.
And finally, I couldn’t agree more with you that agent’s fees to tenants are coming under increasing scrutiny. Rightly so, some of them are rapacious but why or why do so many people pay them? I know your answer will be the agents have a quasi cartel within a particular local area but agents still only represent less than 50% of the PRS in the UK, so there is a choice. Here comes the self-publicising bit – our tenant fees are fair, transparent & offer value for money…….
@ Mike White
If you think that because you tell the Landlord and leave the decision up to him and you then take the illegal action that you are somehow innocent then you really are an innocent walking abroad Mike.
I could list just as many reasons why the tenant, and even the landlord, might well be happy for a tenancy to go periodic. Better get used to it because in the parlous times a lot more tenants are going to want to go periodic if there is any uncertainty about their employment.
And even more of them if they think they are going to get charged anything by anyone on a renewal.
@IO. Vinegar and Vitriol have no place in a public forum such as this, nor does Defamation or False Accusation, thank you.
It is of course the responsibility of the communicator to ensure their communication is properly understood by the communicatee. By your response, I can see I have clearly failed to do so for which I apologise.
I see your commentary on a number of industry forums across the Net and I am of the personal opinion that you dislike Agents in general and certainly Martin & Co agents in particular. I can certainly understand “agent bashing” given both the reputation of many and the current state of the UK housing supply dynamic between rented/owned. However, some, if not most, agents are ethical, fair, fully law-abiding and reasonable – we are just one of those and I would ask you bear that in mind.
@Mike and @Industry Observer – please note that any further personal comments about other people posting comments on the forum will be deleted before the comment is published.
I value BOTH your contribution to the blog very much and am grateful to you but I do not want any unpleasantness.
Just thought I’d add something constructive to this post (I hope!). As a Landlord I find that tenants quite often like to be on a periodic tenancy because it gives them more flexibility. In my experience, I’ve found that rather then leaving me in a vulnerable position regarding cash flow etc, the tenants are more likely to stay long term. I think this is because they haven’t got the ‘deadline’ of the tenancy agreement ending. If a fixed term is ending the tenant has to make a decision whether to renew or move on and make other plans – with a periodic tenancy they don’t have this deadline to think about and therefore time can slip by quite quickly and they end up living in the property for quite a long time.