Failed AST renewal letting fees?

Failed AST renewal letting fees?

9:22 AM, 15th July 2024, About 4 months ago 15

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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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PAUL BARTLETT

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19:37 PM, 17th July 2024, About 4 months ago

Reply to the comment left by Kat Scott at 15/07/2024 - 14:02
"It's not clear from what you have said originally who carried out the referencing for the proposed increases in rent & new AST. "
Initial reference by letting agent, renewal letting by the rent insurance company [more rigorous, I suspect].

"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."
That's the agreed Setup/Renewal Fee £234 that was charged by the agent and paid.

"What cost was agreed beforehand or was a new contract signed?"
Agent T&Cs didn't change just a new annual AST for the tenants. That AST was signed by LL and Ts then failed to reference i.e. not realistic for the tenants.

So my complaint is 18% Renewal Commission of the wrong annual rent, and that the negotiation was ineffective, so should not be paid for. The first is just the numbers, the second about what is fair service. No AST!

PAUL BARTLETT

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19:39 PM, 17th July 2024, About 4 months ago

Reply to the comment left by Simon Lever - Chartered Accountant helping clients get the best returns from their properties at 15/07/2024 - 14:58
That's a good summary of my position. Thanks.

PAUL BARTLETT

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19:48 PM, 17th July 2024, About 4 months ago

Reply to the comment left by DPT at 15/07/2024 - 15:48
"It may be reasonable for the agent to charge you for the tenancy renewal that failed as they put in the work for this."
That work is the £234 Setup/Renewal Fee that they charged and was paid.

"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."
There was no rent increase being periodic so that's why I'm disputing the Renewal Commission of 18% on the annual rent that wasn't ever in effect. They were so reluctant to
be proactive on my behalf that I was forced to raise and serve the s13 notice myself, a service that I had already paid for.

"If they haven't served this notice, then ask them why not."
I lost patience with their inaction so just did it myself. However I could complain of the lost opportunity that was directly their duty to do.

havens havens

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21:23 PM, 17th July 2024, About 4 months ago

You should talk to your letting agent about the fees because the second lease didn't happen. Explain the situation and ask them to reconsider the charges based on what was actually agreed upon.

Kat Scott

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22:00 PM, 17th July 2024, About 4 months ago

Paul,
The agent acted too quickly before the credit check referencing was back they got you & tenant to sign a new contract.
"What cost was agreed beforehand or was a new contract signed?"
"Agent T&Cs didn't change just a new annual AST for the tenants. That AST was signed by LL and Ts then failed to reference i.e. not realistic for the tenants. So my complaint is 18% Renewal Commission of the wrong annual rent, and that the negotiation was ineffective, so should not be paid for. The first is just the numbers, and the second is about what is fair service. No AST!"
They acted unprofessionally not caring if the tenant passed. They should not be thinking of their interest first in doing work that could not be required. In this case, it was not. You need to go through their internal complaint system and then complain to their redress body. This will take time. set your case out step by step pointing out the unreasonableness of their action for the commission. Ask them to justify their actions of having the contract signed before it was clear that the tenant could afford it. I would also ask them for the original affordable reference for those tenants as to whether it was possible that their salary could have increased to afford the new rent.
I would also consider taking your current/future business elsewhere. Look for any agent who is a member of a professional body as an alternative agent.
Best of luck

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