Advice needed on renewal fees

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    Advice needed on renewal fees

    Hi, I'll try and keep this brief.
    so for a bit of background, I am currently a tenant and my fixed term runs until January 2020. The agent managing the property has contacted to advise that the landlord wishes to offer me another 12 month fixed term with small rent increase (great news, I like living here). I phone the renewals team to start the process.

    The problem is they insist that I need to pay £125 to renew the tenancy. I spoke with them, as well as the branch that manages my home about the Tenant Fees Act, but are still adamant that they can still charge me for this.

    The clause in the current TA is as follows:

    "6.4 Should any extension agreement be negotiated or arranged, a maximum fee of £125 including VAT to be paid by both the landlord and tenant, even if for any reason the extension is not completed"

    My questions are these:

    1. is this classed as a prohibited fee?
    2. is there a difference between "extension" and "renewal" or are they used interchangably?

    I really would struggle to afford this fee and would have to try to borrow from family, so I need to make sure that they aren't trying to fleece me basically. Especially as it doesn't bind them to actually grant the fixed term even if I do pay the fee.

    Any advice would be appreciated.

    #2
    They are offering you a 'new' replacment tenancy that will replace your existing tenancy which would otherwise roll over or continue as a periodic tenancy (statutory or contractual respectively). The fee is prohibited for new tenancies post 1st June 2019.
    Renewal = new
    Extension = continuation of something - extending your stay is not the same as extending your lease

    Comment


      #3
      Yes it's a prohibited payment under the Act. Email them a link to the legislation as below and draw their attention to S1(1) and S1(6). http://www.legislation.gov.uk/ukpga/...tion/1/enacted

      Comment


        #4
        Originally posted by cymro123 View Post
        They are offering you a 'new' replacment tenancy that will replace your existing tenancy which would otherwise roll over or continue as a periodic tenancy (statutory or contractual respectively). The fee is prohibited for new tenancies post 1st June 2019.
        Renewal = new
        Extension = continuation of something - extending your stay is not the same as extending your lease
        Thank you for your response.

        The agent is not giving me the option to move to a periodic at the end of the fixed term. They are pushing me to pay and renew or leave. I'm debating speaking directly to the landlord about it

        Comment


          #5
          Originally posted by DPT57 View Post
          Yes it's a prohibited payment under the Act. Email them a link to the legislation as below and draw their attention to S1(1) and S1(6). http://www.legislation.gov.uk/ukpga/...tion/1/enacted
          Thank you for your reply, this is really helpful

          Comment


            #6
            Maybe you could pay it and then if it is a prohibited payment you would be protected against a S21 eviction unless and until it is returned to you.

            BUT the agent may be relying on S30(7) of TFA.

            Contact the LL directly and ask for tenancy to become and remain statutory periodic; point out that this would also prevent the LL paying the "negotiating" fee.

            Comment


              #7
              No they should not charge this. They should instead increase the rent further. The landlord should use this extra rent to pay the agent the fees.

              Comment


                #8
                Originally posted by MdeB View Post
                BUT the agent may be relying on S30(7) of TFA.
                See also https://thenegotiator.co.uk/tenants-...letting-agent/

                Comment


                  #9
                  Originally posted by MdeB View Post
                  BUT the agent may be relying on S30(7) of TFA.
                  Yes, good point

                  Comment


                    #10
                    MdeB I do not think S30(7) is relevant here 1. it applies to tenancies enter into before 1st June 2019 and the fee demanded here is for a new/renewal tenancy not the original tenancy. 2. The TFA prohibitions apply to all new tenancies including renewals entered into on or after 1st June 2019. Legal expertise aside it would be unwise for a landlord or LA to demand such fees unless you are happy to take the risk of a legal bun fight and become case law

                    Comment


                      #11
                      This may be a special case.
                      Mr Ballard is a very experienced tenant's advocate and tenant's union organiser.
                      He's also a MMA cage fighter.

                      I wouldn't want to try and charge him a fee he didn't want to pay either.

                      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                      Comment


                        #12
                        Originally posted by GJL24 View Post
                        The agent is not giving me the option to move to a periodic at the end of the fixed term. They are pushing me to pay and renew or leave.
                        Those are not your options.
                        • You can have a new tenancy agreement, which is a new tenancy and that fee is prohibited (the fee to the landlord remains legal).
                        • You can leave before the final day of the current fixed term if you want to (and you don't from the sound of it.)
                        • If you don't leave, the tenancy will become periodic automatically, either because the contract says it does, or, if the contract doesn't, the law creates a new periodic tenancy for you.
                        • The agent can serve notice (with or without checking with the landlord). Evicting you would take time and stress, and would incur the cost of finding a new tenant who would be an unknown quantity and would incur costs to the landlord.
                        One thing that is not an option is "extending" a tenancy.
                        It is not possible to "extend" a tenancy and the agent should know that.
                        Either the tenancy extends because the agreement says that it does, in which case the agent can't stop it happening or it's not possible at all.

                        It's notionally possible to extend an "agreement", but this agreement is for a tenancy, so it can't operate independently of the rules applying to the tenancy.

                        As this helps the landlord avoid the charge as well, they may be sympathetic.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          cymro123,

                          But S30(7)(b) says, in essence, "if a fee was agreed before S2 came in to force, then that fee is still payable".
                          S30(9) limits the time for which the fee is payable to one year after S2 came in to force.

                          Regarding your points,
                          1. It applies to agreements (not tenancies) entered in to before S2 came in to force.
                            The agreement that requires the payment satisfies that.
                          2. Agreed as a strict statement, BUT S30 identifies exceptions from S1 and S2 of the Act
                          So, it appears to me that, by virtue of S30, as the agreement to make the payment for arranging the follow-on tenancy was made before S2 of the Act came in to force and the payment would be required less than 1 year from S2 coming in to force, that payment is allowed under he TFA.

                          Comment


                            #14
                            Having just read those sections, I understand what you are saying, in that fees can be required up until May 2020 - which is what my agent had told me.

                            It still does not sit right with me though, as the TFA applies to new tenancies and if I were to sign for a further fixed term, it would be a new tenancy, not an extension of my current one. I am getting in touch with the landlord directly and hopefully I can work with them for a resolution.

                            Thank you all for your replies, they have been very helpful.

                            Comment


                              #15
                              If the agent is going to be so letter of the law, I would look at the wording of the agreement relating to an "extension".

                              In a general sense, you can extend your residence or stay at the property, but you can't actually "extend" a tenancy (which is a specific legal term and is often misused in contracts).
                              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                              Comment

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