Two of three tenants leave- effect on renewal fees?

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  • Two of three tenants leave- effect on renewal fees?

    Hi all, hope someone can help with a quick question I have....

    I have 3 tenants living in my property on a joint AST contract. The AST contract is for 1 year, starting August 2007. Two of the tenants have told me that they want to move out, and they have offered to help find 2 more tenants to replace themselves, so that they can move out asap. The third tenant wants to stay put.

    I will therefore draw up a new joint AST contract between myself, the tenant who is staying put, & the 2 new tenants which I will hopefully find.

    The original 3 tenants were found by a letting agent. If all 3 original tenants had stayed put for at least a year, then I would be liable to pay a renewal fee to the letting agent (its just a 'let-only' arrangement, I manage the property myself).

    However, since 2 of the original tenants will have moved out before the end of the first year, & been replaced by 2 tenants who I will have found myself without the help of any agents, how does this affect the renewal fee that I must pay to the letting agent?

    Am I still liable to pay some kind of renewal fee? (considering I have found 2 replacement tenants myself). On the other hand, one of the original tenants (found by the agent) remains.

    Is this affected by the fact that I will be drawing up my own AST contract to include the 2 new tenants & the one who is staying, & in effect ending the original AST contract drawn up the letting agent?

    Can I justifiably refuse to pay part/all of the agents renewal fee?

    Any advice on this matter would be much appreciated.

  • #2
    I seem to remember a thread on unfair terms of contract, and it's possible that the renewal fee for a tenant find only agreement could be unfair, but I won't swear to that. Perhaps someone who posted knowledgeably in that thread can respond?

    Do check the agreement that you had with the letting agent, there might be room for a way out.

    I would argue that because the tenants are not the same, then it is not a renewal situation, so the would not have any claim for renewal fees.


    • #3
      Common sense says the Agent unless they get paid are not going to do anything, whould you ?

      who let the tenants move out you or the Agent you should be asking yourself

      Common sense questions, how the heck you going to deal with the inventory and proving to the deposit schemes who/when delapidations were caused when basically your running a revolving door hotel.

      Start afresh, get 3 new tenants and in future do not let anyone out of the contract (that is why you had one in the first place).

      If you have a nice property follow the golden rule, 6 weeks deposit and a guarantor.

      keep it simple
      "Better an empty property than a tenant without a guarantor"


      • #4
        In the eyes of the law this will be a completely new tenancy.

        On watchdog, about 2-3 weeks ago they had a real rant about renewal fees. They had Marveen Smith from Pain Smith Solicitors on for comment. Unfortunately I was interupted listening to her comment. Unfair terms is a grey area because nobody has fully challenged this letting agency scenario in court. The OFT seems to be against it, but agents still charge (not all of them tho') and people eventually cough up as they are threatened with court.

        Just because somebody says they will take you to court doesn't mean they are right. ANd what the OFT says isn't law.

        Either you come clean about the situation with the agent and negotiate whats fair; or you tell them that your tenants have given notice to end the tenancy and you will do your own let this time; or use an agent who doesn't charge renewal fees.
        All posts in good faith, but do not rely on them

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        • #5
          Thanks for these replies so far.

          Just to clarify - I'm certainly not running a 'revolving door hotel'; there is a 6-month break clause in the contract, & we are coming up to 6 months now (end of January), so these tenants are quite within their rights to leave if they want to. Nobody is breaking any contract here.

          Yes I know that in the eyes of the law this will be a completely new tenancy with a brand new AST contract. And yes of course in the future I will use an agent who doesn't charge renewal fees, but that doesn't help me with my current situation. I'm just concerned that the letting agent will see that one of the original tenants is still there & try & charge me renewal fees because of it.



          • #6
            They can try, but I really don't see any way they could succeed, as it is NOT a renewal, it's a different tenancy, with different tenants.


            • #7
              You mis-understand me on the third option;

              your tenants notice had terminated the tenancy for all tenants. If you now ask another agent to tenant find (your old tenant can re-apply) you cannot get charged by two agencies.
              All posts in good faith, but do not rely on them

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