Here is a question to the blog clinic from Sam who is a landlord
Our tenants requested that they stay on for another year after their first year at the property which we agreed to and the letting agents sent out revised contracts which were e signed on our behalf by the company and we paid the renewal fee.
None months later we discovered that the tenants never actually signed the new lease so are on a rolling contract and the agency suggested that we chase them up instead.
Are the agency able to charge us for the £3000 renewal fee if they failed to actually get the lease signed or notify us about it? Are we able to get a refund?
The fees that your letting agent is able to charge will be governed by the terms of your agency agreement so you need to look at this and see what is says.
However if your agency agreement provides for the fee to be paid on renewal of the tenancy and it has not actually been renewed, then I can’t see how they can be entitled to charge the fee.
It is up to the agent to arrange for the new tenancy agreement to be signed and they have clearly not done this. Its a bit cheeky of them to suggest that you do it! That is supposed to be their job and they have already been paid for it.
On the other hand the tenants have actually been living at the property and paying rent. But not under a fixed term tenancy. They are legally entitled under a periodic tenancy to give one months notice and leave.
This is a case which will probably turn on the precise wording of your agency agreement but my feeling is that you may be entitled to a refund.
What do our letting agent readers think about this? How do your terms and conditions read on this issue and would you expect or be entitled to be paid in these circumstances?
Hmmm, too hard to tell without seeing the wording of the managment agreement. It could well be worded in such a way that the fee is due if the tenants remain in occupation regardless of the tenure.
The letting agent concerned will undoubtedly argue that they spent time preparing and sending the agreement for signature and as such they should be paid for their time. However, if the agent is providing a full management service then obtaining the signature is fundamental to the closure of that chunk of work. As such until that closure is reached they are not entitled to payment. One could even suggest that they have been incompetent in not chasing and obtaining the signature. As stated, it depends on the terms of business agreed – was that signed?
Given the £3000 renewal fee, I think it is time to find a new agent regardless…
However is the £3000 renewal fee, instead of paying 10% of the rent that is collected each month? (This is may just about be reasonable with a London rent)
No question the fee is not payable it is classic Foxton’s charging for nothing. The agent did not do what the fee was payable for – and I doubt if the Landlord contract will say otherwise.
However if it has already been paid it will be one hell of a job to get it back.
I would to be embarrassed to charge the renewal fee. The whole point of the renewal is for the tenants to enter into a fixed term period again ( a renewal ) if they hadn’t and my staff failed to get it renewed then I wouldn’t dream of charging the landlord. More importantly, I would question the amount of that renewal to simply sign another tenancy.
Tricky question, for sure. As you and Jamie have said, it may come down to the wording of the agreement that was made.