Here is a question to the blog clinic from Matt who is a tenant
Our landlord has provided a new fixed term tenancy agreement.
The new agreement states that the landlord can charge £50 plus ‘out of pocket expenses’ if he has to visit after we move out to oversee any repairs or removal of any property we leave.
Does the landlord have the right to do this and is this a reasonable charge?
Also, the purpose of the new agreement is to increase the rent as the old tenancy agreement did not explicitly state this was allowed. The increase is £30, do we have a right to dispute this amount or is it too small?
Answer
There are two issues here:
1. The £50 charge for visits to the property after you move out
The question here is whether this clause is ‘fair’ or not. If it is ‘unfair’ then under the Unfair Terms in Consumer Contracts Regulations 1999 it will be unenforceable.
My feeling is that it is almost certainly unfair.
The way it should work is that at the time you vacate the landlord (or his inventory clerk) will view and assess the property against the inventory which was prepared and checked when you moved in.
You will be charged a (reasonable) charge for any damage that inspection throws up and the landlord will be entitled to claim for this from your deposit.
Your landlord seems to want to charge an extra £50 for every visit, on top of any expenses. However for a penalty clause to be enforceable it needs to be a reasonable estimate of the cost to the landlord of his tenants’ breach of contract.
A claim for expenses might be allowable (so long as they were ‘reasonable expenses’) but what is the justification for the extra £50?
There is also the point that the tenancy will have ended – the tenant can only be held responsible for things which the landlord can prove were caused by him (or her) – which means in practice issues thrown up by the check out report.
They can’t be held liable for anything else.
So far as removal of things left behind are concerned, there is a special procedure for this which you can read about here.
It will of course depend on the precise wording of the clause, but I would be surprised if a claim under this clause were upheld by an adjudicator (if you challenged a deduction from your deposit) or by a Judge (if the landlord brought a claim for a CCJ for the fees later).
2. The rent increase
If the landlord wants to increase the rent at renewal you have a choice – either you sign the new tenancy agreement (and get a new fixed term) or you do not.
If you do not, then you have the right to stay on in the property (under a ‘periodic tenancy‘), but the landlord will have the right to serve a section 21 notice on you and evict you through the courts.
He may not actually want to do that – so its up to you whether you risk this or not.
You can of course always try to negotiate something different with him. For example if he wants you to stay, he may agree to a lower increase.
However there is no formal procedure for challenging the rent in a tenancy agreement for a renewal (as for example there is for challenging rent increases if the landlord serves a notice of rent increase). You either sign, don’t sign, or negotiate something different.
Landlord wants to charge tenant for having to put some effort in, basically. This is ever so tiresome isn’t it. Now you’re compelled to lose your good time writing emails to Tessa and even more time arguing the toss with an adjudicator, i’m sure.
And landlords wonder why tenants just avoid paying the last month’s rent instead.
An old landlord of mine sneaked in a new clause on renewal once. Gave herself a break clause, without extending me the privilege. Did she mention it beforehand? Of course she didn’t. I gave her hell after that. Treat me with contempt, and I’ll do the same to you.
For the record “You will be charged a (reasonable) charge for any damage that inspection throws up” should read as:
You can be charged a (reasonable) charge for any damage that inspection throws up.
Let’s stop assuming, shall we.
A £50 to cover my time in driving from Stockport to Cambridge seems VERY low.
IF I employed an inventory clerk to do the checkout, and therefore only needs to visit due to the actions of the tenant, I could see £50 being very reasonable. A local agent will charge me this just to visit the property and let in trades people, along with checking that they done the work.
(Assuming I am using an agent for tenant find ONLY)
But you shouldnt pass YOUR business costs on to you customers.
If you chose to invest in property 200 miles away, either you employ an agent at your cost, or you dont carry out a check out. Your tenant isnt asking you to do so. It is in YOUR interest to be there / hire AN AGENT.
Remember we are talking about a visit that would not be need if the tenant had not damaged the property or left any of their own property behind.
The tenant could have chosen to organize the repair themselves, so only having to pay for the repair, or to remove their own property rather than expecting the landlord to do so. (Or more practically admit to the damage and agree to pay the cost of it before moving out, so they could let in the repair person the landlord chooses to use.)
If the tenant had been in the property for any real length of time, there would be fair “wear and tear” and therefore the visit would not JUST be for the damage the tenant had done and so it would be very hard to justify the charge in most cases.
I have seen agents that charge £75 an hour to organise any repairs due to damage the tenant has done. The cost of organising the repair is clearly just as must the tenant’s responsibility as the cost of the repair its self.
If a landlord lives in Stockport and has a property in Cambridge that it the landlord’s choice (and problem) and not the tenant’s. There is no way a tenant ought to pay a landlord’s travelling expenses to get to and from a property he lets.
As for paying for a landlord’s time, the core agreement of a tenancy is that the landlord gets paid for providing property. That is where he makes his money. There is far too much these days of both landlords and letting agents drumming up reasons to extract more cash from tenants. All businesses have administration and may need to engage in credit control. BTL is the only one I know where it is reckoned that these costs should be heaped on the tenant. It is of course entirely proper that a landlord should be compensated for any loss he incurs reducing the value of his property, but he ought not to expect to be paid for running his own business.
Remember this is additional time due to the tenant damaging the property, e.g. not keeping to the AST
I have to say that I am with Lawcruncher on this one. Landlords should not expect tenants to pay what are in effect the landlords’ business expenses.
Some landlords seem to expect that they have a right to have uninterrupted income from their properties with all costs incurred by them paid by tenants. This is neither realistic or fair.
I’m in full agreement that rents should be set at the cost of running the business without any ‘add-ons’.
However-
“BTL is the only one I know where it is reckoned that these costs should be heaped on the client.”
Is more than a bit rich coming from a member of the legal profession who have turned charging hidden costs into an art form.
Not sure what you mean by ‘hidden’ charges. Yes solicitor’s letters cost a fortune. But the point is you pay for legal advice, you pay for legal representation and if it’s wrong, you have someone who is liable.
If you dont ask upfront what the fees are, then that’s your own fault. I dont think the Solicitor will be invoicing for the ink for the printer, or for the electricity bill for the office. The fees are for a service.
I may be a (former) member of the legal profession but that does not mean that I approve of what some lawyers do.
When I tally up my training fees for a client they are based on a standard daily rate and an amount to cover costs of hotel and travel.
Working in this way I can give a prospective client a set fee. If I deliver a course 5 miles from home then its great. If I have to get up at 5:30am and travel to Bournemouth or if the course an overnight stay in a hotel I take the hit from the fee, I dont try and whack all my ancillary costs onto the client.
You win some you lose some.
The economics of my wife’s business, travel agency, works the same way. Sometimes she gets penalised by some mad last minute charge levied by British Airways. She doesnt lump that onto her client, she just takes the hit on that one and moans to me…………..sometimes all night!!!!!!!!!!
And yet so often I hear the call from the landlord community, whenever costs of licensing or registration are mentioned saying in effect “This is an outrage, an attack on tenants because we will have to pass the costs on”.
I dont pass costs onto my clients, neither does my wife. Why does the landlord industry do it?
The short answer to “Why does the landlord industry do it?” is because tenants let them. Tenants do not think of themselves as customers. When it comes to letting both landlords and tenants go into feudal mode. Unacceptable practices have arisen because letting agents make it up as they go along and landlords have taken a leaf out of their book.
I am sure that most landlords do not go into BTL with a view to extracting maximum cash from tenants. Rather I would say that they have unrealistic expectations. When buying they look at the price and estimated rent, do a simple calculation and say: “7.9% – that a good return.” They forget to allow for void periods, commission, maintenance and the like which apply irrespective of whether the tenant is good or bad. They expect to get the property back exactly as they handed it over. They also fail to appreciate that whilst BTL may be an investment it is also a business and no business runs itself.
Let’s not get mixed up between two different types of charges. I will pass all costs onto my tenants when I am able to do so. Mostly just by charging as much as I can do so for the rent without creating voids. (Ben will do the same by setting his training prices to get the level of work he wants.)
Costs like licensing or registration will just be included in the rent. I can only increase the rent if the supply and demand allows it. Therefore the risk with licensing etc is that it will reduce the supply of rental properties, and therefore lead to a LONG TERM increase in rent. (If licensing was shown to work, then it would get a lot of support form landlords, but it does not work. Much better just to clone Ben and send him after the really bad landlords who will just ignore any licensing systems anyway.)
Then there are costs that are created by the actions of the tenant, for example a tenant loses a key. It may only cost me £10 to get a new key cut, but why should I not also charge for my time doing so, and travel etc? Hence many landlords have at least £50 charge for a lot key. I would be VERY happy if no tenant every paid this type of charge by behaving in a way that avoids the charge.
A charge to arrange repairs when a tenant has damage a property is not much different to a charge for a replacement key – the tenant can choose not to pay it by not damaging the property. Just like a lost key charge, I would be very happy if tenants avoided it by changing their behaving.
(I don’t like charges to renew tenancy agreements, unless it is the tenant that is requesting a new fixed term. Mostly it is agents creating unneeded work, so they can then charge both the tenant and the landlord for it.)
It would be cheaper for the tenant to change the locks…!!
Unlikely as it would need a locksmith to open the lock without a key…. (Some landlords have a locksmith holding a copy of all their keys, so the tenant pays the callout charge directly to the locksmith and a new key is cut in the back of the locksmiths van.)
However if a tenant did this in a single let, and let me have enough copies of the key, I would be very happy. One less problem for me to think about.
The way I see it is this:
If a landlord sustains a loss arising from a breach by the tenant of an obligation the landlord is entitled, subject to section 18 L&T Act 1927, to have the loss made good. Further, the law on contractual penalties prevents him from making a profit.
If a new key costs £10 then that is the landlord’s loss if the tenant fails to hand over the key. If a landlord charges £50 to include £40 for his time I do not see how he is doing anything other than making a profit of £40. The profit of £40 has to go on his tax return. He is in no different position from the retailer who supplies the key who may have paid £5 for it and made a profit of £5.
What if the letting agent charges £50 for their time, likewise if a locksmith charges £100 to get the original key out of the safe, so a copy can be given to the tenant.
So why should the landlord be the only person that cannot charge for his time. Put this another way, if the landlord can’t make a small charge for time, should the landlord not just setup a locksmith to do the work, then makes a much larger charge to the tenant…
Over on LanlordZone we have had a case of a landlord wanting to charge £90 for keys and another where £78 was demanded for changing 3 lightbulbs. Whilst a landlord or agent may think that more than reasonable in each case, if you add up a series of small charges what you are paying is wholly out of proportion – not that those figures are not wholly out of proportion in any event.
There is a continuum at one end of which a landord has to be expected to do the odd job to tidy a place up and not charge for it and at the other end of which it is entirely reasonable for him to engage professionals. If he is wanting to engage a professional to do a small job because he reckons he ought not to do it for nothing, I think that the rule of thumb test has to be to ask whether the landlord would be prepared to pay for the job to be done where there was no tenant to recover it from. If no landlord is prepared to pay £78 to have 3 light bulbs changed then no tenant should be asked to pay that sum for the job to be done.
Ian, a landlord can charge for whatever they want, so long as they have a tenant who is willing to pay for it.
That said, a landlord shouldn’t charge for their time put in maintenance, repair and management of the property they let out.
Why ?
Because they already do. Every tenancy agreement states a landlord’s responsibility for maintenance, repair and management. The rent money you collect for a property also include your services as a manager of the property.
If you choose to outsource those services to an agent, a locksmith, a tradesman of any sort – that’s perfectly fine. You can set whatever deal you want with a 3rd party, but you’re already paid for your time and services our of the rent money you collect.
Furthermore, your presence in the property at the time of repairs or removals or cleaning is not mandatory. You can very easily give a key to your agent if you have one, or put it under the mat even.
Tradesmen have a very often practice to collect and return keys they need to enter a property. If you need to inspect your home after their done, it’s your CHOICE not OBLIGATION.
All in all this charge is completely out of line and falls in the “take the skin off their backs” category, rather than a justified tax.
It depends if the repair is due to the unreasonable actions of the tenant….
Tenants wanting letting in when the lost the keys is a clear case when it is “tenant pays”.
In a HMO depending on the lock system, if one tenant loses the front door key, then the lock needs changing QUICKLY and new keys given to all tenants. As this needs doing quickly, it could need 7 visits to the HMO, if there are 6 tenants that need to be given the new keys.
A landlord should not be looking to the tenant to pay for routine management and maintenance. Hopefully we can all agree on that. The question is what is included in routine management and maintenance. I do think that a landlord is entitled to assume a perfect tenant. If the tenant is late paying rent the landlord must expect to have to chase it up without cost to the tenant. If a tenant calls a landlord out for something he could have fixed himself or turned out not to be a problem that is part and parcel of being a landlord. As I said above, if the landlord does not live nearby that is his problem, not the tenant’s.