As a tenant I am served up a new "Assured Shorthold Tenancy Agreement" every 6 months where I live by the Letting agent my landlord uses.
I have previously debated the renewal fees and their fairness but continue to pay these fees on the bases that the letting agent usually says "pay or we will take legal action as stated in my tenancy agreement I agreed to this".
So, this morning I was woken up by some random ideas going through my head.
- If i'm paying these fees then the landlord is too
- are they actually unreasonable
- I know they aren't illegal but are the side effects worth it if I were to fight the agent on this.
- would I also be fighting my landlord or just the agent
So I did some digging in my tenancy agreement ...
Key useful pieces of information:
- Deposit paid £1,800
- Term of tenancy 6 months
- Type of tenancy: Assured Shorthold
Key terms that help clarify my situation ...
6.1 The Agent shall place the Deposit in a nominated Client account as soon as reasonably practicable. Any interest earned on the Deposit shall be retained by the Agent, and used to cover administration costs.
9.9 To Pay £100.00 + VAT for each extension of the Tenancy
So lets get some figures together here ...
At the time I write this question out the bank of england base rate is about 0.5% with typical interest rates on bank accounts ranging from around 1% to 4% per annum.
lets a assume a low interest rate on a typical bank account of around 2% is put on that deposit each year so the agent receives £360 for doing literally nothing.
Then 6 months later they get another £120 from me for opening up the existing digital copy of the contract they have for me and moving the dates on by 6 months and printing a couple copies then charging me to sign them.
so, per year the agent gets £500 for sending out 2 copies of the same document 2 twice and then filing it away.
... and that's just what they charge me.
It's reasonable to assume the agent is charging the landlord too, and probably similar figures.
I have some options ...
- Simply refuse to sign new agreements and risk eviction.
- Sign the agreements but then have to justify to a judge why refused to uphold clause 9.9 in the contract.
- Contact the landlord direct and agree the stupidity of these costs in order to put in place a longer term agreement (assuming he's willing)
I have also noticed that there may be some precedent to argue the fees under the Unfair Contract Terms Act 1977 but that's vague and may not directly apply here.
In Scotland however I noticed that such fees have been made illegal and pressure is mounting to make it law here.
So, my question is ...
Have I explored all the options here and if not what other possible routes could someone go down if presented with this situation?