Failed AST renewal letting fees?

Failed AST renewal letting fees?

9:22 AM, 15th July 2024, About 14 hours ago 7

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Hi, the letting agents found tenants for my property, and we agreed on a 12-month AST. I paid the letting fee as we had agreed in the Confirmation of Marketing.

Over the year, the Bank of England raised interest rates several times, which increased my mortgage costs. In the tenth month, we asked the tenants if they wanted to stay and proposed a rent increase to cover the predicted costs.

The tenants said they wanted to stay.

The tenants didn’t pass their references, so we couldn’t finalize the second AST at the higher rent. They ended up on a Periodic Tenancy under the Housing Act, paying the original rent.

Despite this, the letting agent still charged me a renewal fee and a letting fee based on the higher rent that wasn’t agreed on because of the failed references.

I don’t agree that the fees were correct as the second AST never worked. Renewal is fair.

Can Property118 readers give some insights and experience on this, please?

Thanks,

Paul


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Just Be Happy

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11:48 AM, 15th July 2024, About 12 hours ago

Personally I try to avoid annual renewal fees as they are a bit of a rip-off if the tenant is already in situ and no work required by the agent. Check the T&C's of your agent agreement, as some clauses can be renegotiated / struck out. There needn't be any extra fee payable for notices re. rent increases, although a charge is normal if issuing brand new contracts. If however your existing AST is moving onto a periodic basis I can't see the need for any new fees to be payable. You could check with other agents what terms they would offer and use that to negotiate with your current agent.

David Smith

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12:13 PM, 15th July 2024, About 11 hours ago

Did the agent highlight to you from the outset other than their standard T&Cs that you are liable for renewal fees ?
If not then you are not liable as per the High Court ruling OFT v Foxtons.
However if they have an ongoing involvement in the tenancy for instance Collecting the rent or holding the deposit then perhaps they can.
Even on a period tenancy.
I have personally have never paid one or intend to.

David Smith

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12:51 PM, 15th July 2024, About 11 hours ago

Further to my previous advice.

In the future when you first instruct an agent tell them you will be holding the deposit yourself (in one of the protection schemes), Collecting the rent, Managing the property & no renewal fees.

This will eliminate any hassle again.

Rob Crawford

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14:02 PM, 15th July 2024, About 10 hours ago

What was the renewal fee? Was it just to cover the cost of obtaining updated references/ affordability checks? If so I fail to see how you can complain, other than you should have been kept informed. As no new AST was issued, there should be no charge for this. What you have to decide is, are you happy to accept no increase in rent with the current tenants? The fact that the agent conducted updated ref checks 8s admirable, most don't bother and you eventually end up with tenants in arrears because they can't afford the new rent during the fixed term.

Kat Scott

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14:02 PM, 15th July 2024, About 10 hours ago

Paul,
It's not clear from what you have said originally who carried out the referencing for the proposed increases in rent & new AST. If you when back to the agent to do this then they will want some money for their time and the costs of the referencing. What cost was agreed beforehand or was a new contract signed? they should have told/ explwined the costs upfront before providing any service to you. You need to check the details or start a formal complaint with them. If you're still not happy with the result complaint to their redress scheme.

Simon Lever - Chartered Accountant helping clients get the best returns from their properties

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14:58 PM, 15th July 2024, About 9 hours ago

If there has been no increase in rent how can the charges be be based on the higher figure which is not in effect.
If your contract says that they are entitled to charge for l renewal and letting fee then this should be on the ongoing rent not the proposed one.
I would also argue that the property has not been re-let so how can they charge a letting fee.

DPT

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15:48 PM, 15th July 2024, About 8 hours ago

The tenant being on a periodic tenancy is to your benefit, so I think that aspect is a good outcome. It may be reasonable for the agent to charge you for the tenancy renewal that failed as they put in the work for this. However, I can't see how this can be charged at the higher rent level unless they've now served the tenant with a s13, (form 4) notice to increase the rent during a periodic tenancy. If they haven't served this notice, then ask them why not.

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