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kaladorm

Spt And Renewal Invoice

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I believe I asked this question a little while back and got the expected answer. I'm hoping now someone can help me with finding some some direct evidence or regulation I can quote to confirm that, should the contract move onto a statutory periodic tenancy, that a renewal fee cannot be charged.

For reference when I challenged why the letting agent sent me a renewal invoice charge of £100 for a contract I am not renewing, I received the following response:

As per your contract the renewal fee is due as in line with your tenancy.

 

Whether proceeding on a SPT or a 6/12 month contract renewal fees are always required as you will be staying within the

Any advice welcomed

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Just ignore them. Moving onto a SPT is a statutory requirement, not an extra service you need to pay for.

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Just ignore them. Moving onto a SPT is a statutory requirement, not an extra service you need to pay for.

I don't intend to pay it and will be informing them as such. I'm looking for something a bit more formal I can use though rather than just telling them to get stuffed.

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I don't intend to pay it and will be informing them as such. I'm looking for something a bit more formal I can use though rather than just telling them to get stuffed.

Personally I wouldn't want to get into the position of having to justify myself. If they want you to write a cheque, they need to prove why you are obliged to do so. Just saying that you "are required" is not much of a case.

They probably know perfectly well that there is no obligation on you to send them more money so it's not something you need to prove.

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The only requirement I can see is that it is written into the contract. I did quote this on another thread but for reference:

4.1.7 Should the Tenant remain in the property beyond the fixed term, whether this Assured Shorthold Tenancy

Agreement has been renewed or if the Tenancy becomes a Statutory Periodic Tenancy, a renewal fee of

£89.50 + VAT is payable immediately by the Tenant to the Landlord‟s Agent.

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The only requirement I can see is that it is written into the contract. I did quote this on another thread but for reference:

4.1.7 Should the Tenant remain in the property beyond the fixed term, whether this Assured Shorthold Tenancy

Agreement has been renewed or if the Tenancy becomes a Statutory Periodic Tenancy, a renewal fee of

£89.50 + VAT is payable immediately by the Tenant to the Landlord‟s Agent.

Well you could argue that term was unfair under consumer contract laws.To charge a fee you must do something. Or make it very very clear when the contract was originally signed. Foxtons lost a case with similar fees (to the landlord)

http://www.lettingfocus.com/2009/07/foxtons-loses-unfair-letting-renewal.html

Edited by gadget

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Its quite simple, legally a fee is only allowable when you perform a service of some form. If the tenancy rolls onto a periodic then no service has been performed therefore no fee is allowable

So politely tell them to shove it, safe in the knowledge there is bugger all they can do about it.

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This sort of thing is frustrating, part of the problem is the idiot with the crap job at the agency don't know anything at all about the law and think you are wrong and they are right. Their boss told them so, and you're not a property expert like them, you're just a tenant, the lowest of the low! Despite the fact these days the muppets in these offices are of an age where they themselves have no chance of ever buying property so all rent themselves unless theyre still at their parents house. But I digress.

The fight is more against ignorance and arrogance than anything else, these teenagers just need a good slap in my opinion.

If you stick to your gunsm eventually it will get to the owner who might actually have some grasp of the business they are in and just tell their underlings to give up trying to chase it. Unfortunately until then you just have to say no. I just wouldn't pay it and if asked repeat you don't have to.

I sympathise, it is annoying having to deal with idiot children regarding your home, but that's where the bubble has got us.

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This sort of thing is frustrating, part of the problem is the idiot with the crap job at the agency don't know anything at all about the law and think you are wrong and they are right. Their boss told them so, and you're not a property expert like them, you're just a tenant, the lowest of the low! Despite the fact these days the muppets in these offices are of an age where they themselves have no chance of ever buying property so all rent themselves unless theyre still at their parents house. But I digress.

The fight is more against ignorance and arrogance than anything else, these teenagers just need a good slap in my opinion.

If you stick to your gunsm eventually it will get to the owner who might actually have some grasp of the business they are in and just tell their underlings to give up trying to chase it. Unfortunately until then you just have to say no. I just wouldn't pay it and if asked repeat you don't have to.

I sympathise, it is annoying having to deal with idiot children regarding your home, but that's where the bubble has got us.

If this was bookface I would be pressing 'like' right about now, but it isn't so I shall simply say 'here here' :-)

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I agree with everyone else that the provision in the contract is likely to be declared an unfair term. However, the following argument is also available:

Should the Tenant remain in the property beyond the fixed term, whether this Assured Shorthold Tenancy Agreement has been renewed or if the Tenancy becomes a statutory Periodic Tenancy, a renewal fee of £89.50 + VAT is payable immediately by the Tenant to the Landlord‟s Agent.

Call the words in italics "the clause", the original tenancy "T1" and the SPT "T2".

The clause is contained in the agreement which created T1. The terms of T1 only apply to T1 and are unenforceable once T1 ends except to the extent that they were not complied with during T1. The clause could not apply to T1 while it continued because it only purported to come into effect after T1 ended. There can therefore be no possibility of there being a breach of the clause during T1. The terms of T1 cannot therefore be invoked to require payment.

What about the terms of T2 given that the same terms apply to T2 as to T1? The clause is incorporated as it stands and, just as it could not apply during T1, so it cannot apply during T2. The clause makes little sense anyway when applied to an SPT. Even if T2 were a new fixed term tenancy with the clause incorporated it would have to apply to the future and not to T2.

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I agree with everyone else that the provision in the contract is likely to be declared an unfair term. However, the following argument is also available:

Should the Tenant remain in the property beyond the fixed term, whether this Assured Shorthold Tenancy Agreement has been renewed or if the Tenancy becomes a statutory Periodic Tenancy, a renewal fee of £89.50 + VAT is payable immediately by the Tenant to the Landlord‟s Agent.

Call the words in italics "the clause", the original tenancy "T1" and the SPT "T2".

The clause is contained in the agreement which created T1. The terms of T1 only apply to T1 and are unenforceable once T1 ends except to the extent that they were not complied with during T1. The clause could not apply to T1 while it continued because it only purported to come into effect after T1 ended. There can therefore be no possibility of there being a breach of the clause during T1. The terms of T1 cannot therefore be invoked to require payment.

What about the terms of T2 given that the same terms apply to T2 as to T1? The clause is incorporated as it stands and, just as it could not apply during T1, so it cannot apply during T2. The clause makes little sense anyway when applied to an SPT. Even if T2 were a new fixed term tenancy with the clause incorporated it would have to apply to the future and not to T2.

I understand your logic here but not sure if that is actually the case. Wouldn't that imply that the other clauses of the tenancy agreement also do not apply, in which case I can start lighting small fires, making excessive noise, subletting and bringing in pets all with impunity?

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I understand your logic here but not sure if that is actually the case. Wouldn't that imply that the other clauses of the tenancy agreement also do not apply, in which case I can start lighting small fires, making excessive noise, subletting and bringing in pets all with impunity?

The point is that all the clauses apply*, but the clause under consideration is a special case because it purports to apply** to something which happens after the tenancy ends. So, whilst tenancy 1 is running it "applies" after tenancy 1 ends. However, once tenancy 1 ends the provisions of tenancy 1 no longer apply. The clause is carried forward to tenancy 2 but must "apply" after tenancy 2 ends.The application of the clause is continually leapfrogging ahead and so in fact never gets to apply.

*Except for notice provisions as set out in section 5(3)(e) HA 1988

**In fact you cannot make a provision apply after a tenancy ends; the best you can do is to provide for what flows from a breach of covenant committed while the tenancy was continuing.

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Updates

Me:

A contract becoming a statutory periodic tenancy is a statutory requirement, under Section 5 of the Housing Act 1988 and requires no intervention or service on behalf of the letting agent. As no work is required by the letting agent for this to occur, it is not a service that can be charged for.

I would also like to draw your attention to The Unfair Terms in Consumer Contracts Regulations 1999, which covers the clause in the contract, indicating it will have no binding effect on the consumer as it satisfies the necessary criteria within. If you would like to review this further, there is the case of the Office of Fair Trading vs Foxtons estate agents, where the case was brought against the letting agent under this regulation specifically against renewal and other fees.

Them:

Hope you are well.

I have looked into this matter and unfortunately no renewal fees can be wavered. Even though there was no renewal agreement the fees goes into all of the administration processes and the time into ascertaining if a renewal is required or not.

Even though there is minimal work in a statutory periodic tenancy compared to a 6/12 month contract we charge the fee to stay within the property after the initial fixed term agreement. This fee will only be charged once now you have gone periodic.

I apologise I could not be of any help however the contract and the charges for the additional services been signed by yourself and states:

"Should you remain in the property beyond the fixed term whether the Tenancy has been renewed or it becomes a Statutory Periodic Tenancy an administration fee of £89.50 plus VAT is payable

Me:

Thank you for looking into this. As you have acknowledged that the work required for a statutory periodic tenancy is minimal, surely it cannot be that the same amount is charged as to prepare and renew a a fixed term contract. Are you able to provide a breakdown of exactly what the charges cover?

Them:

As you can understand our procedures, to renew a contract whether for 6/12 months or periodic a charge of £89.50 + VAT is required.

You have signed the contract and the charges for additional services. Please pay the renewal fees as soon as possible otherwise you will be breached.

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Today's response from me:

As I have previously stated, I do not believe the charges can be levied as they fulfill the criteria within The Unfair Terms in Consumer Contracts Regulations 1999.

I would like to resolve this matter as reasonably as possible, and have kindly requested that a breakdown of the charges is provided so that we can come to some agreement. If you do not believe that this is possible, do you think it would be prudent to instead refer the issue to the Consumer's Association and the Office of Fair Trading to investigate further, as they have some experience of this matter?

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There is also this:

The contract (tenancy agreement) is between LL and Tenant.

The agency agreement is between LL and agent.

There is no contract between agent and tenant.

How is the Agent going to enforce a term in the tenancy agreement? They can't. Only LL can do that.

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Fairly simple answers to their rubbish

--------

As you can understand our procedures, to renew a contract whether for 6/12 months or periodic a charge of £89.50 + VAT is required.

You have signed the contract and the charges for additional services. Please pay the renewal fees as soon as possible otherwise you will be breached.

--------

1. You are not renewing anything, it is a new type of tens cy which has arose

2. This is the most important one... They aren't providing you any service therefore they cannot charge. The work to ascertain what type of tenancy is not the tenants problem. The fee is a renewal fee amd you have not renewed.

I would suggest doing one of 2 things.

Either

Tell them you will not be paying the fee as it is a renewal fee and you have not renewed. It has already been proved to be An unfair contact term, so the worst they can do to you is try to take you to court, where they wil loss. Or get the landlord to give you notice (would be a very stupid landlord to do that)

Or

Stop answering them, ignore the requests and frankly there is bugger all they can do about it

All the best whatever u do and do keep the updates coming

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It's what I intend to do, as I'm fully confident that it cannot be upheld.

I suspect what will happen is they will go quiet and seek to claim through the TDS, as there is a clause in the contract allowing them to subtract moneys owed under the deposit (and they will argue it is owed). Rather than take me to court for the money, it's far easier for them to wait until the end of the tenancy, make the claim, and require me to go to court to get it 'back'.

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It's what I intend to do, as I'm fully confident that it cannot be upheld.

I suspect what will happen is they will go quiet and seek to claim through the TDS, as there is a clause in the contract allowing them to subtract moneys owed under the deposit (and they will argue it is owed). Rather than take me to court for the money, it's far easier for them to wait until the end of the tenancy, make the claim, and require me to go to court to get it 'back'.

Good, hopefully they will go down the TDS route as the law states the TDS cannot make deductions for any fees. So as soon as they submit that deduction you dispute it and they will lose

So they would be the ones having to go to court ;-)

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Spoke to the Head of Property Management today (also concerning some maintenance issues). Essentially relayed all my discussion points from the previous posts.

He wasn't willing to accept my assertion, or confirm the previous email I have acknowledging the work required is minimal. He stated that the work involved was sending emails, contacting the landlord etc. and updating the system, even though no contract had been renewed. I pointed out that, should they have not done this work, the tenancy would be in the exact state it is in now.

He also didn't seem to understand my point about the contract being between myself and the landlord, so even if the agent wanted to enforce the charge the landlord would have to sue for breach of contract.

I am a little concerned that there is also a clause in the contract stating they can charge £25 for each letter sent for overdue moneys owed, so they may just start hurling charges left right and centre. There are also multiple other clauses in the contract for charges where they take £75 out of the deposit for checking out as well which we'll have to deal with when the time comes.

I suspect I will be hearing from their lawyers soon however. I believe I have a very strong case, I just need to work out how much hassle my sense of justice can afford :)

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I am a little concerned that there is also a clause in the contract stating they can charge £25 for each letter sent for overdue moneys owed, so they may just start hurling charges left right and centre.

I'd take that as a good sign that they simply don't know what is enforcible. The OFT has explicitly said a clause like this is out of order:

http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft356.pdf

Potentially excessive penalty:

Unfair Term

Should it be necessary to send a

letter with regards to late payment of

rent, these are chargeable to the

tenant at a rate of £35 plus VAT

Ways of revising term:

The tenant is responsible for any

reasonable costs reasonably

incurred required to compensate the

landlord for any breach of obligation

on the tenant's part.

I suspect I will be hearing from their lawyers soon however. I believe I have a very strong case, I just need to work out how much hassle my sense of justice can afford :)

There's no hassle. You've explained your position now just ignore their letters. If they take you to court (which they won't) just show up and they'll lose

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There is also this:

The contract (tenancy agreement) is between LL and Tenant.

The agency agreement is between LL and agent.

There is no contract between agent and tenant.

How is the Agent going to enforce a term in the tenancy agreement?

The answer to that is: possibly by applying the Contracts (Rights of Third Parties) Act 1999; see section 1 The question is what "purports to confer a benefit" means. In practice most commercial agreements exclude the operation of the Act and so there there has, so far as I am aware, been no case where the court has decided the effect of words where A agrees with B that he will pay the fees of C.

In this case the relevant clause reads: "Should you remain in the property beyond the fixed term whether the Tenancy has been renewed or it becomes a Statutory Periodic Tenancy an administration fee of £89.50 plus VAT is payable." Since it does not say to whom the fee is payable there is an argument that section 1(3) of the Act is not fulfilled. (In fact since it does not say by whom it is payable!) Of course if the agreement excludes the operation of the Act that puts the matter beyond doubt.

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  • 238 Brexit, House prices and Summer 2020

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