Tenant fee bill and new charges
Dear RLA and members,
I have just received the following message from my managing agent:
"On the 15th of January the Governments housing spokesperson in the House of Lords announced that from the 1st of June all charges to tenants are to be outlawed on all new tenancies.
The impact of this Bill will obviously have a dramatic effect on letting agents across the country with many set to go out of business due to losing around 18% of revenue overnight.
Our own position is that from the beginning of June, we will raise our monthly fee by 1.5% of the rent (£xx + vat). We will however look to increase the monthly rent the tenant pays wherever possible so that you as our client will not be affected.
Our market research shows us that our competitors will be raising fees by up to 5% and we have made every effort possible to keep the increase to an absolute minimum. We have made this decision out of absolute necessity and haven't raised our fees in 14 years.
We look forward to continuing to look after your property with the objective of obtaining as much rent for you as possible from good tenants whilst making sure all of your legal obligations are met.
As always we thank you for your custom."
We signed an agreement with the managing agent only a few months ago (not 14 years ago!), which stipulates clearly what the managing fee is and that this fee is applicable until the tenant found by them remains at the property. The tenant has signed an AST for 12 months. I have checked our contract and there is no mention of any circumstances when the agent may increase their fees. I therefore understand that the agent is not allowed to simply make this increase even in spite of the new Tenant fee bill. Likewise I do not see how they expect to increase the tenant's rent in the middle of the tenancy, and I would not approve of this.
I wonder what the opinion of the RLA and other landlords is. I clearly understand that some fees that the tenants should have paid have been banned (e.g. check-out) and that these will now have to be borne by ourselves, but I disagree with the agent's approach.
I plan to ring the agent and inform them that I refuse the increase until the current tenant is at the property. After that I will either be able to shop around for a new agent or agree a new fee with the current one.
I am grateful for your advice.
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