I need to leave my Joint Assured Shorthold Tenancy early, and I am aware I have to find a replacement tenant otherwise I am liable to pay rent.
As I understand it there is a £50 cap on the fee that can be charged when replacing a tenant, however in our contract (our fault for skimming over this section as I didn’t expect to leave early!) it stipulates that:
If you wish to change the identity of any tenants during the tenancy, you must inform the Landlord in writing of this. If the Landlord agrees to the change, a new reference on the incoming tenant will be carried out and a new tenancy agreement will need to be signed. This service carries an administration charge of £500.
Can anyone advise me whether I have any ability to contest on the grounds that as I understand this fee should be capped at £50. Or have I misunderstood and he is within his rights to charge this (obscene) amount?
The TFA states that they would have to provide evidence of the charges but they cannot publish fees in contract. That would be illegal.
Page 69
A landlord or agent should be able to demonstrate to you that any fee charged above
£50 is reasonable and provide evidence of their costs. You should ask your landlord
or agent to provide evidence in the form of receipts or invoices. Any costs that are
not reasonable are a prohibited payment.
The contract clause you quote makes it clear that a new tenancy agreement will have to be signed if there is a change of any one of the joint tenants. Therefore your current tenancy will have to end and the Tenant Fees Act section covering this is actually Schedule 1, section 7, “Payment on termination of a tenancy”. In this case, the payment isn’t limited to £50, but to the landlord/agent’s actual costs. £500 is on the steep side, but if the agent can put forward a case as to why the fee is so high then your only recourse would be to challenge it with Trading Standards, which you may not win. The other consideration is that the landlord/agent does not have to agree to release you from the contract and if you make it difficult for them, they may choose to enforce the terms of the tenancy agreement and make you pay until the end of the fixed term.
Thanks all for the help here, much appreciated. As a follow up query I note another element of the 2019 Act which discusses late rent payments.
You can only be charged a late payment fee once you’re 14 days late with rent.
The late payment fee must be mentioned in your agreement and you can’t be charged more than 3% APR above the Bank of England base rate.
You can only be charged by either your landlord or agent, not both.
You can’t be charged for things like:
references
administration
In our contract it also has the below:
An administration charge of £250 will be charged for each reminder (via text message, email or letter) sent regarding late or non-payment of rent. These are initially sent at 3, 7 and 10 days after the rent becomes due and every 7 days thereafter, until the rent is paid in full.
This definitely seems in breach of the Act, is anyone able to advise on this section too?
this will not stand up in court. Next time take a copy home first and READ the contract (boring I know) £250 is outrageous. Never trust an agent. Except Open rent
That clause and your first clause is illegal.
I would speak to Shelter or CAB. When I rewrote my contract after the TFA my solicitor made me remove any charges from the contract that did not read £50 inc VAT or reasonable amount as documented in the TFA. David Cox of ARLA on the landlord law course in 2019 said it was illegal to write in charges into a contract unless those that were specified in the TFA.
The £500 is void because in itself it is a documented charge.
It would be cheaper for you to call Anthony Gold or David Smith at JMW and get free advice for 20 minutes than pay £500 blind.
Some agents may still be using old copies of their contracts that pre-date the TFA. As said above, such clauses would no longer be enforceable, and frankly with such a ridiculous fee, we’re probably never enforceable even before the Act.