Landlords charged unfair renewal fees by managing agents
A recent case in the High Court will be welcome news for landlords who have been annoyed to discover that a managing agent has charged a “hidden” renewal fee. Some agents charge quite large fees (11% in this case) when the tenancy continues after the initial term even if the agent did not have to do anything to arrange the renewal. The judgment has not outlawed renewal fees altogether but it has said that to be enforceable they must be clearly described in the agent’s sales literature and not hidden in the contract. The Judge said that typical landlords would not read all the terms of the contract and they would not expect important matters like fees to be buried in the small print.
This ruling only affects landlords who are regarded as consumers; those with no more than two properties. This is because the case was brought under the Unfair Terms in Consumer Contracts Regulations 1999.
Landlords may reclaim fees in these circumstances, even if they were paid as long ago as six years. The first step is to write a letter of claim to the managing agent. If that does not work consider taking action in the County Court.
Are you a landlord suffering from unreasonable renewal fees? If so post a comment and let us know your thoughts.
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RSK homes found a tentant for me in July 2008 and I manage the let myself, because they did not offer a full or partial management option. However, they still charge me £1k a year to simply renew the contract, a task which involves only a few very short letters. The charge is ridiculously high in relation to the cost incurred by the agent and seems to me to be completely unreasonable. I would be interested to receive any advice regarding this matter. One thought that came to mind was to instigate an Assured Shorthold Tenancy Agreement that upon expiry of the initial fixed term continues as a monthly statutory periodic tenancy and hence does not need renewing each year.