New Agent business term since I last used them...

[Landlord1206]

Hello, I finally need to change my tenant after a number of years. When I used an Agent to find this tenant there was a new addition to their general terms, namely the renewal fee element. If the tenant renewed after the original term ended the Agent would take a further fee.
At that time. It was a new thing and I seem to recall a large agent going to court trying to enforce this.

I red lined this paragraph then with no arguments back then but maybe times have changed regarding this and agents are more incistent on it.

I wonder if you other landlords now accept this term i.e. renewal fee, or take it out as I wish to.
Thanks.

[jpkeates]

The agent is allowed to charge for the services they provide (and you need them to make money to provide you with the service that they want).

Your commercial agreement is up to you to agree - the agreement that was found to be unfair was one that gave the agent a (large) fee if the property was sold. Agents renewal fees might be unfair if they are large fees for doing nothing - but if they document a new agreement with a tenant, they're doing something for you and can be recompensed for it.

However, you are an existing customer and they can't impose a new agreement on you without your consent.

[Landlord1206]

Thank you for the reply.. To clarify, I manage the propertymyself and only use the Agent at initial stages, to find and vet prospective tenants. Of course they are rewarded as per our agreement then. A year on if tenant wishes to stay longer, extend their tenancy, the agent does no work for me and therefore I am reluctant to agree to terms that would award them a fee. I wondered if others do likewise nowadays.

[jpkeates]

Then don't agree to the fee.
If the agent doesn't do anything, they probably aren't allowed to charge a fee anyway.

[tatemono]

It's a buyer's market for LAs so shop around if the one you're thinking of using is insisting on it. Personally, I don't work with agents who charge anything substantial for this because it almost always results in them pocketing money for doing virtually nothing.

Also, consider whether you need to renew the AST anyway. Letting it roll into a periodic may do all you need it to do for your situation.