Two tenants who refused to pay a renewal fee have been let off the payment – even though the agency was entitled to it.
The men, both described as housing crisis campaigners, are now calling on other tenants to refuse to pay renewal fees which are allowed in law until next June where tenancy agreements were in place before June 1.
Nick Ballard works for tenants union Acorn, while flatmate Louie Herbert has worked for both Acorn and 38Degrees, according to LinkedIn.
The pair decided not to pay agent CJ Hole, part of The Property Franchise Group, the £90 renewal fee.
Although fees charged to tenants are banned, agents can still charge renewal fees until next June.
However, the two men told CJ Hole that they would not pay the fee on the grounds that if they were new tenants, charging them would be illegal.
They offered instead to sign a new contract.
Herbert said: “It was a little bit of a daunting prospect, because we could’ve lost our home.
“We think it’s a legal grey area, and it was the principle of the thing for us. It’s a mad legal space for a year of this transitional period.”
He claimed that CJ Hole maintained it still had the legal right to charge a tenancy renewal fee, but in the end, dropped the demand and asked the pair to sign a new contract.
Herbert said: “We signed it, and have not paid, and we won. Common sense prevailed.
“Although the letter of the law may well say they can charge this, we think them not enforcing it sets a precedent.
“We refused to blink beause we knew we had the backing of our fellow members of Acorn who would have been supporting us to raise our case if CJ Hole had also refused to blink and went ahead with trying to evict us.”
He added: “The point is anyone could have done this.
“This means that between now and next summer, everyone renting in Bristol who renews their contract to stay living in a rented property will have to pay letting agencies just to send out fresh contracts to sign.
“Our demand was for £90, but sometimes they are a couple of hundred pounds.
“If everyone just simply refused to pay them, as we have done, then this will save tenants tens of thousands of pounds combined.”
A spokesperson told the local press that while it would not discuss individual cases, the law allows for a transitional period where tenants are still liable for fees and charges stated in a fixed term tenancy agreement entered into before June 1 this year.
Meanwhile the BBC has reported widespread confusion about the fees ban.
It cites the case of Lewis Ridley, 23, who in June wanted to rent a flat in Liverpool but was charged £180 by his unnamed letting agent.
He sought help on Twitter and was then able to challenge the agent, who dropped the charge and apologised.
According to BBC News, enquiries about tenant fees to Citizens Advice rose by 54% to 430 in June.
https://www.bristolpost.co.uk/news/bristol-news/two-bristol-men-take-cj-3146169
As agents try and increase revenue to stay afloat and provide a service, the only way they can do this is try and increase their fees by increasing the rent.
So the tenant actually loses at the end!!
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“Backing of their fellow acorn members”…..The agent probably feared a bunch of unemployed acorn picketers outside their office
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Dont want to pay a renewal fee? Okay no problem, we have reviewed the market rent for the property and we need to increase by £50 per month.
Landlord gets £600 per annum more, charging 15% management fee is another £90 per annum for the letting agent.
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This is why estate agents are seen as below investment bankers in the morality stakes!
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But marginally ahead of tenants who knowingly stiff their landlords for the rent.
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Another story, which perhaps the abolition of section 21’s may help. I hope so!
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Flockfollower,
You are aware letting agents are not charity’s?
If we can agree on that point you will no doubt say we get our fee from a landlord.
In the past agents have treated Landlords and tenants as equals and been a middleman to keep the peace.
Given we are not a charity, given we very obviously work for the landlord. I still need an income and my job is to maximise the landlords rent.
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Who are our clients? Who should we be acting in the best interests of?
How as an industry have we justified these fees. How many agents put on their invoice to the landlord that they provided fully referenced tenants and that was what the landlord was paying for, but we also then charged the tenant for references! Double charging.
We are not charities, but we as an industry due to greed meant that the government took a look at our practices and said they were at best immoral at worst illegal and so banned them.
We are all to blame and double for ARLA for showing a complete lack of leadership on tenant fees.
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You sound like a militant nutter.
Every offence intended.
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Ah, the defence of liar, liar pants on fire!
If all else fails throw some abuse.
Lets have a reasoned discussion on what agents are here to do, not abuse each other!
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Just re read the post. Our job absolutely is to maximise the return of the landlord, can someone please explain how charging tenant fees achieved this?
A cynic would say that this sounds as if agents are only interested in maximising their returns.
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Not sure if you are obtuse or stupid.
There is a set level a letting agent needs to make in order to operate.
In the past agents have split fees between landlords and tenants NOT double charged.
Now we need to charge double to the landlord which means they are putting up rents.
If you like I can spend the day with you and educate you further for £1500 as it sounds like you are currently clueless.
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Again, you know nothing about me but choose to try and insult me.
I would suggest to pay someone £1500 to learn how look at issues from more than one point of view.
If the fees were split, did it say that on your invoice or did it say that each party had to pay for this service.
A very important legal distinction, although obviously you would not want to believe me as I am clueless!
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You are doing a fantastic impression of someone that is clueless.
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I would respectfully disagree with your opinion as so far I have not seen you present any logic against my points except saying that some how tenant fees helped keep everyone costs down or some such nonsense! Doing this on phone so losing full comments.
Would you tell your landlords that tenant fees were good as they helped to keep rents down which appears to be the industries main defence if these fees?
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You’ll never win an argument with a disgruntled tenant on fees no matter how much sense you make
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How much do we complain about Rightmove fees?
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Because if the Tenant is paying for THEIR references and credit score (even if they fail and are not offered the Tenancy) then the Landlord isn’t having to? And as we will not be having to charge the Landlord for something that the Tenant should pay, we ARE maximising their income, by removing unnecessary expenditure?
And before you try to have a go at me, I am not saying that the disgusting fees charged by some (mainly corporates) were acceptable, clearly they were not. One in my area charged THREE TIMES what I used to, for exactly the same thing. And that is why many of us were behind the idea of a fee cap, even if it meant we could only charge £75 inc vat for referencing, and £30 inc vat for changes to the tenancy or whatever.
I’ll repeat the point I made all along. Why, as a homeowner, should I have to pay application and survey fees to get a mortgage/remortgage? Surely the survey is to benefit the lender, so that they can be sure their ‘investment’ is safe? Why should I pay for it? And I’m providing all the bank statements and proof of income and deposit, as well as paying interest on the money I’ve borrowed, so why should I pay you to see if you are willing to lend me the money?
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Couldn’t agree more with you on a fee cap, but no Conservative politician is going to get involved with setting market fees it gos directly against their ethos on he free market.
In regards to your point on mortgages, the difference is that you as the borrower have full access to the whole of market for mortgages and can therefore make a decision based on interest rates and fees. It is your choice who you choose. The tenant did not have this option, they had to use which ever agent the landlord had chosen, therefore free market economics were not working correctly.
I am a passionate believer in the free market, but that is not to say that I believe that the way a free market always operates is correct, that is why we have politicians and a government to stop the market going awry and that is exactly what has happened to tenant fees.
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“In regards to your point on mortgages, the difference is that you as the borrower have full access to the whole of market for mortgages and can therefore make a decision based on interest rates and fees. It is your choice who you choose. The tenant did not have this option, they had to use which ever agent the landlord had chosen, therefore free market economics were not working correctly.”
Sorry but tenants did have a choice, no one forced them to rent from the agent with rip off fees, look at other houses from agents with reasonable fees. I am actually for the new legislation but also agree a cap would have been better as now agents will tend to offer a lesser service to tenants and be less flexible.
We built our business around Landlord fee, yes we had tenant fees but they were a fraction of what other agents charged. Something had to be done, how could some agents justify charging in some cases £700 + just to set up a fee and then also charge £150 to renew a contract.
With regards to the chaps from acorn, they were wrong, the agent was acting according to the law and if one of my tenants disputed the fee I would just make a claim against the deposit. We cant choose how to interpret the law, that what courts are for, like wise we cant choose which laws to obey otherwise society just become anarchy
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Unfortunately the government disagreed with you regarding whether tenants have a choice. We could argue that point all day and still not be able to prove one way or the other. However, you make my point, there were agents charging obscene amounts of fees, that could not be justified to anyone other than as pure profiteering on tenants who had limited choice of properties in an upward market. I can absolutley get behind any argument that says then ‘tenants need to pay more rent’ that is much more attributable to the open market, but how do landlords feel about the argument that is being expressed in this thread and was used when consulting with the government on this, that tenant fees kept rents down? I think that gave the government all the information they needed to say that these fees were not being used for what they were advertised for, BY SOME AGENTS, but were in fact being used as a major profit centre. Whatever your political beliefs are, this is legislation brought in by the Tories, the one party that you would expect to support free market practices and even they could not get behind this one!
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The legislation in my opinion was needed as yes some agents used tenant fees as a cash cow, no dispute there and as always its those that tried to it right that suffer. It has however been poorly drafted and does need to amended going forward.
What ever one political leaning are in my opinion the agent should not have backed down on the fee as this will just open the floodgates for other tenants to argue their current agreements. I would have agreed a discounted rate as this would ten at least compensated for the time to draw up the new agreements.
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Said exactly the same why should these people get a free meal… go and raise a mortgage if they think its any easier
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Please explain the logic. CJ Hole and their landlords want these tenants to stay. They want to charge a fee that has always been at best too much, at worst immoral just to write the new tenancy agreement. Because of the abuse of these renewal fees they have been banned and yet CJ Hole still want to charge them because they contractually can. If the tenants refuse to pay what do they do? Take them to court or serve a section 21 notice? Can you imagine what the judge would say in either of those scenarios? ‘ So you want these people to stay as tenants but because they are refusing to pay a fee that is now banned to new tenants, you actually want them to leave!’
Really, as an industry we need to grow up and understand who our clients are and what is in their best interests.
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If the tenant refuses to pay, they dont get a new tenancy agreement…in this specific situation. I already know of agents not offering tenancy renewals for exactly this reason, be it mad or whatever consequences of the tenant fee ban for all parties are being felt.
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Nothing to stop agents offering renewals, surely if the landlord wants the security of a fixed tenancy then it is in their, the clients, best interest. If the landlord is happy to continue without a fixed term, who is it hurting?
Will tenants start requesting renewals now? Will agents legally be able to refuse if the landlord is happy for one to be given.
I grant this law change will change things, however I do not believe it is going to adversely affect either landlord or tenant, at which point we as an industry need to start asking ourselves why we were doing it?
Where is ARLA, Safeagent etc on this. Do they even have any kind of ethics department or even person responsible for ethics in their organisation?
As per that Chinese proverb/curse’ May we live in interesting times.’
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This is supposed to be a service industry. Treat tenants as clients, not the enemy, and get paid back in spades.
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Not saying you are wrong but how can a tenant pay a letting agent back in spades?
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If you are a good letting agent you will have a good relationship with a good tenant. If you are a good letting agent, no matter how good you are a bad tenant will still screw you over, not pay the rent and leave the house in a state.
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Absolutely, that is why we as an industry should be lobbying for stringent licensing that we can then use as leverage to be able to have input into peoples credit histories. Mortgage payments count against peoples credit histories, why don’t rent payments? I can only imagine that as an industry we are not trusted/qualified to have input into this, b ut this would be a great thing to gain in my opionion and would make people think twice about late/non payment of rent.
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I agree that rent payment should be noted on credit scores, but maybe the reason it doesn’t is that for loans/credit cards/mortages etc you are defaulting on a loan, rather than reneging on a contract. And the same as phone/utility bills have to go through court to get noted, so does rent.
It should all be on there, but that is probably why it isn’t as it is non-payment for a ‘service’ rather than a default on money borrowed.
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We have just joined Experian Rental Exchange to do exactly this .. reward good payers with improved credit score and punish bad payers with adverse credit score
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Thanks James, I will look into that. Advertising that tenants will be rewarded on their credit history is exactly what we should be pushing as an industry.
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Interesting that this Acorn ‘expert’ repeatedly gets the date wrong in the video clip…..
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Regardless of whether the charge is fair or morally defendable – currently it’s the law. If agents were allowed to choose only to abide by the bits of the TFB that are morally sound, we’d still be charging for references and taking a decent deposit.
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Unfortunately there were lots of agents that abused the tenant fee system and overcharged.
Our job as good agents is to work in a way that ensures we are able to provide a good service with in the law. If there was some ethical leadership from our membership organisations we may still have tenant fees albeit at a lower rate.
We can defend ourselves putting up rents by saying that it is market led and we are here to maximise our landlords return. Can someone tell me how tenant fees helped either tenants or landlords? Honestly, I am I interested to hear and would then ask why that argument was not made to the government.
ARLA, anyone?
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Tenant fees help as it paid for a professional letting firm to manage and set up a safe property and make sure it complied legally with all obligations
Click on channel 5 one evening and see all the programs about slum landlords. None use a letting agent … wonder why?
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Totally agree with you, the PRS is like the wild west and there are many very bad landlords who this fee ban will not have any effect on. However, there are also plenty of stories, here on Eye on agents who have also gone bad. Unfortunately fees did not stop this, we need to think outside the box.
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The main reason rents have increased is because we as Agents are now having to foot the bill for referencing, and in my case charge the full cost of the inventory to the Landlord, rather than splitting it between Landlord and Tenant, as it protected both. Yes, I did state on the invoice to both that part of the fee was a contribution towards the Inventory and Administration. An Inventory I just had done for a 3 bedroom, 1 reception room house was £125 + VAT.
So we are now charging the Landlord more, and in an effort to keep his income at the same level, the Landlord is now increasing the rent. A short term Tenant will not notice too much of an issue, but for the tenants in a property for 2/3/4+ years, they are going to pay thousands more than they would have. So, yes, in that respect, the Tenant fee benefitted both sides. The Landlord didn’t get stung with a large deduction from the first month or two of rent, and for (in my case) a reasonable fee to cover my costs, the Tenants got a nice home at a fair rent.
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We all knew the tenant fee ban was coming, we had over three years warning, from when it was announced.
The Government should have just said all fees, unless in the permitted payment section, were banned on the 1st June 2019 irrespective of when the tenancy started.
Having this year long transitional period, has just caused confusion, and made our industry look even worse, when some agents are still trying to charge fees, when some are not. It does not help, when you have ARLA suggesting that you sneak in clauses into contracts signed before the 1st June 2019, so you can charge them after,
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I don’t disagree with that. Asking current loyal tenants to pay for renewals when new unproven tenants get it all for free does leave a bit of a bad taste – but on the other side of that, the DPS handing cheques to tenants for the extra deposit that they are holding – when I have rent arrears on their ledgers is a bit galling too.
Bl**dy great big mess as everyone anticipated.
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I cant believe some of the comments on here. It is utterly immoral in my view for a tenant to ask for a service and then refuse to pay for it! Would anyone relaistically have that expectation of any other industry!! No they wouldnt. We as an industry need to stop bending over and taking it! If the tenant wants a renewal and the landlord wants a renewal they should both pay for the time taken to do this. If the tenant doesnt want one and the landlord is happy for it to roll over to a periodic then so be it. If the tenant wants to stay and the landlord insists on a renewal or ending the tenancy then the landlord has to take the consequences of that, as does the tenant. And yes they will both have to pay one way or another for this. Why are we as an indurstry prepared to lower ourselves, take the moral high ground and ask a tenant or a landlord to pay a fair fee for the work done in any situation, if they refuse, enforce it! Otherwise we will all be taken for a ride for a very long time to come and the tenants and landlords will ultimately share our collective pain!
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Amen
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Your thoughts are logical, however the reason these fees were banned was because the tenants were not allowed to operate in a free market, they had no choice on what agent to use and SOME agents chose to abuse that monopoly situation. Therefore the golden goose was taken away by the government. Whose fault was that?
As I have put further up in these comments, we need to lobby for licensing and more input into peoples credit history in order to add vlaue to our proposition to our client landlords. This would improve the quality of tenants and their respect for properties whilst enabling us to demonstrate our worth to our client landlords. This would make the good agents stronger and the bad agents weaker.
Unfortunatley the tenant is not our client although the TPO wants us to act as if they are. We need to rething our proposition and act as an industry not a herd of cats.
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Factor in we are dealing with the entitled snowflakes generation who expect everyone to run around after them for free
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If rent payments show on credit files then there would be more rejected tenants who are forced to live in poor standard properties, the whole system just like Universal credit is playing into the hand of the rogues, I know private landlords who collect rent in CASH from tenants on UC, none of which goes through the tax system. tenants have complained or been unable to pay the small admin fees we use to charge, but have come to my agency to avoid paying the high fee the corporates were charging.
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