No commission charges for tenancy renewals

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  • No commission charges for tenancy renewals

    I am a landlord who manages my own properties after the letting agent has found tenanat, made references and taken first month rental and deposit

    I get very miffed when agents charge, be albeit a lower commsion rate, for just issuing an "extension of contract" after the initial tenancy period

    I have just heard (informally) that there is going to be a new ruling with ARLA letting agents that they will not be able to charge commission to Landlords when a tenant renews by an "Extension of the contract".

    I also understand that Letting agents can still charge for issuing the extension notice

    Has anyone heard of this ruling, I only hope it is true then it truly would be Christmas

  • #2
    Good. I hope it gets completely outlawed. It's ridiculous paying agents again just because the tenant stays longer.

    Is this just a London thing? They don't charge it here in Wolverhampton.

    I also understand that Letting agents can still charge for issuing the extension notice
    I assume by that you mean a new tenancy agreement? At least they're doing some work for their money in that instance, the thieving gits.


    • #3
      What rally miffs me more is that one agent I work with will not refund any commissio if the renant leaves after say six month AST and I have paid agent 12 months commission

      Does anyone know where I can find out about the ruling I iriginally mentioned


      • #4


        • #5
          Hello, just joined this fab forum!

          I am a landlord who manages my property in London and my agent want to charge me 10% of annual rental if I extend for another 12 months as well. I think this is common practice in London.

          My question is how easy is it to get out of (ie not pay anything for extensions) if the T&C's (which I signed) states that all renewals are chargeable? Would I serve a Section 21 and then invite the tenants back using my own AST? Is that a way out?

          Any ideas?


          • #6
            This question has come up before. I believe you would serve a S21, dispense with the services of your agent, and then invite the tenants to reapply for a new tenancy. I think!
            Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.


            • #7
              Just to repeat!

              I've posted this many times but will gladly do it again.
              1. When you engage an agent to introduce a tenant only, their contract ends with the landlord as soon as the tenant takes up occupation.
              2. This suggests that "extension" fees are not due as the agent is not having to do anything for their money. Only if a new AST is drawn up might you have to pay another fee.
              3. The OFT expects agents fees to be "reasonable" and "fair".
              4. If you think you have been excessively charged take it up with your local TSO, not the OFT who will just send it back.
              5. You could take any such issue to the small claims court; it is the only place where these matters can be ultimately decided, and I suspect most judges would rule in favour of the landlord.
              6. An agent's fee is not reflected by whether the tenant stays for the full fixed term....BUT if they were poorly referenced then you might have grounds for a refund. Of course you inspected the references obtained (on your behalf) by the agent before approving the tenant didn't you?
              7. ...........And finally.............If the agent deducts the fee from the first months rent AND the tenant's deposit and sends you the landlord the remainder, he is making unlawful deductions from the tenant's deposit......very common in the East End I gather. The agent should only take commission from the rent, and bill you for the shortfall.
              8. Don't be bullied by such agents.
              The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.


              • #8
                As always Paul F gives sound advice but it does not answer my original question.

                Does any one know if there is going to be a ruling which means that letting agents will NOT be allowed to charge any commission on extension of contracts.

                If the answer is "Yes" then I am in a quandry because if I stop paying one of the agents who I work with - they will then just favour other Landlords when they have new possible tenanats - it seems just catch 22


                • #9
                  Look! An agent can't charge you for effectively doing nothing and I would probably suggest using the law of contract under your common law rights. As any dispute is a civil matter you would have to let the courts decide.

                  The question is does the agent have a contractual right to make a charge to you for something which is being relied upon from a contract which has been fulfilled at the outset. I would say not!

                  Before you sign any contract you should always have it inspected by an independent person if you are not sure of its meaning, and you should be invited within the wording of the contract to discuss any matter with the firm you are enganging, AND for you to refer it to a solicitor or CAB before you sign it. You can use any lack of this information on this point to state you were unaware of your rights. Judges don't usually approve of unfair terms in contracts that do not protect the consumer i.e. you. The Sale of Goods (and Services) Act 1994 I think might include what you need too. Does that help?
                  The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.


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