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  • Property-a-holics

    Rental Renewal Fees to Agents

    Hi Everyone,
    Gr8 to be in Property Tribes. I hope Vanessa's Singing Pig experience will ensure we benefit from her valuable opinions and comments.
    I have one cherry I am still chewing on - that is the subject of paying Agents for rental renewals when they do absolutely nothing. Based on my specific London apartment, the terms of my contract with Ludlow Thonpson state that I must pay them a fee on the annual renewal. Last year, the OFT successfully took Foxtons to court on this matter where the terms of the contract were deemed to be "unfair". Unfortunately, Foxtons are appealiing (no not really!) - and the appeal has not yet been heard. Which leaves us all in a state of flux.
    However, I am sick and tired of having to "cough up" and thus reduce what little profit there is (I unfortunately have a fixed 3 year mortgage for my sins) - especially as they do NOTHING to support the renewal (I do everything including contract). I am also a member of the Residential Landlords Association (RLA - and by the way well worth joining) and I thought the Forum would be interested to learn that when I broached the subject with them recently, they advised the following:
    If an Agent demands payment for rental reneal fee, simply advise them that you are not paying and that if they sue, then you will simply ask the court to put the case on hold until the Foxtons appeal case is decided.
    I think that this approach may be of benefit to other landlords in a similar position (perhaps I am unusual in that my tenants seem to be long term - if they left, then the problem goes away).
    I would be very interested in other landlords' views on this matter.
    David
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    Hi David
    If the agents are managing the property then unforunately i dont think there is a way round this. Some of the agents we have used in the past have charged us £75 just to renew a Tenancy Agreement...I cannot see how they can justify this charge. I have now instructed a couple of our agents to let the tenancy become a rolling contract.
    I have actually sacked our agent in Bradford and have promised all the work that needs doing to one handyman, i was introduced to him via the agent...Cheeky i know but this way i save on paying 10% every month and then still having to decide what needs to be done and i get this chap to do all the work. Yes i pay him abit more but at the end of the day i get what i pay for.
    The other thing that gets me is Gas Certs....the bulk of the portfolios I manage are around the East and West Mids. I have a gas guy who gets all our work and he charges £30 to carry out Landlord Gas Certs. Yet the guys in LA's in Bradford would bill me £60-£80. They must think I'm abit errr soft lol.
    Im all for people making money but some of these costs and charges are out of this world.
    Agents have quoted for Silly things in the past. One landlord was beside himself as the LA contacted him direct to say a 2 year old Hob had gone faulty and it was going to cost £150-£200 to put right. I got a colleague to call someone out of the yellow pages and got him to go and have a look. It transpired that when this hob was wired in the Sparky had stretched the cabling to get it to reach and over time the cabling had come loose under the hob....£30 later all was well and up and running again.
    Regards
    Wasim
    ps I manage over 50 props for different landlords and to date i have never asked any of them for a fee on renewal of an AST. Why risk losing the business.
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    Hi Wasim,
    Tkx for your prompt comment. I sympathise with your comments on excessive charging.
    In our case, the agent handled the tenancy on a letting only basis. Hence my disgust!
    I will follow RLA's recommendation unless any of you guys have better suggestions.
    Cheers,
    David
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    Hi David
    Why do you not send the Tenant a contract to sign yourself...esp if the LA is just finding the tenant for you.
    Regards
    Wasim
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    Wasim,
    I think I have not understood my situation. Let me pls try and clarify:
    Ludlow Thompson found my tenant. I renewed all contracts with the tenenats directly (no help from LT) and afterwards had to pay LT renewal fees (accordingto their contract with me (for doing nothing). The RLA are an independent body supporting Landlords. Their advice is to NOT pay the agent and if they decide to sue, to say that the court should put the case on hold until the Foxtons appeal case is heard and over.
    I really believe that the time is right to take a stand. I wated to get other Forum members' opinions on the principle here - to NOT pay and await the appeal.
    Does this make more sense?
    Thanks for your support.
    David
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    The best place to deal with the issue is before hiring the agent and signing a contract indicating that you would pay a renewal fee. The agent can decline to provide the services if you do not want to sign up for what they are offering (including the renewal fee).
    I do not feel the fee is 'fair'. I also do not think it is fair to sign a contract and then decide that you do not want to live up to what the contract says because it is more expensive than you wanted to pay.
    We want a contract to be enforceable when it benefits us. We should expect a contract is enforceable when it does not benefit us. That is why people are told to read and agree before signing.
    John Corey
    https://www.ChelseaPrivateEquity.com/blog
    https://www.Twitter.com/John_Corey
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Hi David
    In a privious very senior position with a corporate lettings company I studied this for quite some time and it was at the time it was popular as a debate in the press.
    Look at the wording in the Terms that you have signed. If the agent is rent collecting or managing the property the feeis for ongoing service, however on a tenant find there - as you rightly point out - is no case for "recharging" for a service already completed. However, if you have entered into signed terms stating you will pay a renewal - you have accepted this and whilst it may be unfair, you have agreed it. I have seen it swing both ways.
    I think - and remember that I am a Letting Agent - that it is unfair to recharge for a service. I think renewal fees are an outdated charge enforced by agents as an income stream. A charge should be made to redo tenancy agreements and thats it - and any good agent valuing a good ongoing relationship with a client should honour this.
    My advice is explain your case in writing, and ensure you get a reply from the senior staff. Explain your ongoing relationship because if they ignore you, and you relet through them - they may just try and hold onto your money!! I have seen this happen - and then you enter a battle to get the money back.
    Thats my "Agents" 2 pennies worth!
    Best wishes
    Sally
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    David Nunn said:
    Wasim,
    I think I have not understood my situation. Let me pls try and clarify:
    Ludlow Thompson found my tenant. I renewed all contracts with the tenenats directly (no help from LT) and afterwards had to pay LT renewal fees (accordingto their contract with me (for doing nothing). The RLA are an independent body supporting Landlords. Their advice is to NOT pay the agent and if they decide to sue, to say that the court should put the case on hold until the Foxtons appeal case is heard and over.
    I really believe that the time is right to take a stand. I wated to get other Forum members' opinions on the principle here - to NOT pay and await the appeal.
    Does this make more sense?
    Thanks for your support.
    David
    Hi David
    I wasnt confused, i just could not believe that they would still charge you for you renewing an AST even if they had no involvement.
    Dont pay them as you have been advised.
    Regards
    Wasim
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    The OFT has today welcomed a Court of Appeal Judgment confirming its views on the application of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) ahead of a substantive hearing against Foxtons Limited at the end of this month.
    The OFT commenced High Court proceedings against Foxtons in February 2008 seeking an injunction under the UTCCRs preventing the estate agency using terms, considered by the OFT to be unfair, in its lettings agreements with landlords.
    During the preliminary stages of these proceedings the OFT appealed against a ruling by Mr Justice Morgan which accepted arguments from Foxtons that any injunction on unfair terms could only apply to future contracts, rather than preventing the use or enforcement of unfair terms in existing ones.
    Today, the Court of Appeal overturned this ruling, confirming the OFT's long-held view that it can take enforcement action under the UTCCRs to protect consumers in relation to both existing and future contracts. The Court of Appeal stated that the UTCCRs aim to protect consumers, and were of the view that traders should not have the freedom to pursue existing customers without restriction, in correspondence or by litigation, in order to enforce contractual terms that have been found to be unfair.
    The fairness of the terms in any Foxtons' contract themselves have not yet been considered and this will form the substantive case listed in the High Court during the week commencing 27 April.
    The Foxtons' terms on which the OFT has sought an injunction can potentially require landlords to pay Foxtons substantial sums in commission, where a tenant continues to occupy the landlord's property after the initial fixed period of the tenancy has expired when Foxtons plays no part in persuading the tenant to stay, and no longer collects the rent or manages the property. The OFT has also objected to Foxtons' terms that require a landlord to pay these sums after they have sold the property. Foxtons contends that such terms with landlords are not unfair.
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    Hi Vanessa,
    Thanks for posting this from Whitehall Pages. I received a separate notification of it from Adam Powell of CSense Ltd. This is gr8 news particularly as Ludlow Thompson are now pressing me for payment (before they go through a Debt Collection Agency for recovery.
    They just have to realise that their reign over landlords is coming to an end! Unfair Terms and Conditions just shouldbe abolished in my opinion - draconian is just one word to describe them!
    Let's see how the Appeal goes at the end of the month. I cannot see how Foxtons can successfully appeal now!
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    Hi
    I am a Landlord and I also own a small letting agents......my views on this are that there is no reason for an agent to be paid twice; the definition of a fee is a charge or payment for professional services, therefore the agent carried out their professional service before and at the commencement of AST by marketing the property, references, finding tenants etc and was paid a % to do so.... but an agent that does not have to do anything on a renewal but expects to be paid again but has not had to carry out a professional service in any way cannot honestly believe that it is 'good practice or fair' to retake a fee.....
    It is like buying a brand new car from a dealership and the dealership a year later asking you to pay again for the car because you still have it and want to keep it!
    Vicki
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