Renewal Fees & Terms of Business

Published on Tuesday, 13 March 2012. Posted in Case Studies


Following the property being let for a year, Miss H (the Landlord) was surprised to receive a demand for a further annual renewal fee when her tenants stayed on as periodic tenants. The Agent ignored her subsequent query and, seven months later, with no further contact, issued a final demand. Following further correspondence being issued to the Agent, Miss H raised a formal complaint.



After her initial query, Miss H wrote on two further occasions to query the fee to which the Agent failed to respond. Miss H then informed the Agent when the tenants left which occurred prior to the second anniversary of the tenancy. Eighteen months after billing Miss H, the Agent instructed solicitors to pursue debt recovery proceedings for the initial fee and for a second year’s annual renewal fee. Miss H then wrote three more times querying the bills and advising that the property had been sold. Once again the Agent failed to respond but did issue a letter indicating their intention to charge a third year’s renewal fee. After
informing the Agent that Miss H had contacted my Office, the Agent finally calculated their fees referable to the extent of the periodic tenancy but did not apologise for having ignored Miss H’s correspondence or for having pursued her under threat of going to court for substantial sums which related to periods to which they were not entitled to charge.


Whilst I was satisfied that the Agent’s Terms of Business allowed them to charge a renewal fee for a periodic tenancy, the appropriate clause was contained within the small print of a 17 page contract and had not been drawn to Miss H’s attention at the point of instruction or when the contractual term was coming to an end. I considered this to be inconsistent with best practice and to the duty to fully explain fee terms as required by the TPO Code of Practice and severely criticised the Agent for their inefficiency. An award of £750 for harassment was made and I directed the Agent to cancel the outstanding fee. 



If an agent receives a complaint, regardless of whether they consider it to be justified or not, it should be responded to in a timely fashion and in accordance with the Code of Practice. It is simply not acceptable to ignore a complaint about fees and then threaten legal action in pursuit of payment.