The Accidental Landlord

Victoria Whitlock falls out with her letting agent over payment

A letting agent is trying to charge me renewal fees even though the tenant he found last year didn’t renew his contract and moved out three months ago.

The agent simply won’t accept that his guy has left. It is a frustrating (and sometimes amusing) dispute.“I got the impression that he planned to stay for a few years,” the agent tells me. “I’m surprised you say he moved out so soon.”

Why doesn’t he just call me a liar? I tell the agent that his tenant, a geeky accountant, found a Russian bride on the internet and when she became pregnant six months later they decided to move out of the one-bedroom flat and into something bigger.

What makes this exchange so funny is that I wrote to the agent when the tenant decided to move out and his agency re-marketed the flat for more than a month. He even showed several prospective tenants around the place himself. Eventually it was re-let through a rival letting agency with an office right next door to his. He tells me he’ll have to check his records and get back to me.

Two weeks later I get another letter insisting that I pay the eight per cent renewal fee within 10 days or I’ll be taken to court. This is pretty galling as a friend of mine has just re-let her property via this very same agency and she bartered them down from a 10 per cent commission to eight per cent with an agreement that there will be no renewal fees if the tenant stays on after a year.

To tell the truth I’d be surprised if any landlords are still agreeing to pay agents more than a year’s commission since London agency Foxtons was slammed by both the Office of Fair Trading and a High Court judge for its renewal fees last year.

The High Court ruled it was unfair of Foxtons (and therefore presumably all agents) “to require a landlord to pay substantial sums in commission where a tenant continues to occupy the property after the initial fixed period of the tenancy has expired”.

It also banned agents from continuing to charge landlords commission after the sale of a property when the original tenant remains in occupation and from charging landlords commission if they sell the property to their tenant.

Although the final court order didn’t outlaw tenancy renewal fees, it did say that agents must be more upfront about all these charges and not hide them in the small print of their contacts, which they often did in the past. I’m curious to know whether the ruling has had any real impact on letting agency fees and ring a few to check what they charge.

My 30-minute, one-woman survey reveals that while most still include renewal fees in their standard contracts, many are prepared to scrub them out when challenged. Incidentally, none of the agents I speak to mention their renewal fees at the outset, and I think I hear them squirm when I ask them what they charge. Many are also overly eager to point out that their initial commission is negotiable.

Ironically, only Foxtons refuses to negotiate, insisting that its commission and renewal fees are fixed at 11 per cent for lettings only, with a smaller fee for the first two years’ renewals. Following my little experiment I would urge other amateur landlords not to be afraid to challenge letting agency fees in the future... and to wish me luck in convincing my agent that I owe him nothing at all.

Victoria Whitlock is a mother of two who lets three properties in south London.

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