Portico in London has been ordered to pay a financial penalty of £2,000 as a consequence of breaching the Tenant Fees Act.
The company, headquartered in Southwark until it was acquired by the Leaders Romans Group earlier this year, was penalised by Southwark Council because it required a tenant to make a payment of £195, for leaving joint tenancy of a flat in Camden, at the end of its term, when other parties to the joint tenancy wished to continue.
Government guidance says that such a charge should not be more than £50. Although agents are permitted to charge more if the amount of their reasonable costs are higher, any attempt to charge more than £50 must be backed up with evidence of these costs.
Emails sent by the company in June 2021 demanded an upfront “outgoing/exiting tenant fee” of £195. However, the tenant challenged this, asking for evidence of their costs in line with the guidance, which was not provided.
When the tenant said they were going to escalate the matter to the Property Ombudsman scheme and notify trading standards, the company reduced the fee to £50, as a “gesture of goodwill”.
Cllr Darren Merrill, cabinet member for a Safer, Cleaner Borough, said: “It is disappointing that we had to take action in this case, as the guidance to agents is quite clear. Thankfully, this tenant knew their rights and refused to pay the banned £195 fee. However, it should never have been presented in the first instance.
“We are committed to improving standards in Southwark’s private rented sector. I am pleased that thanks to the work of our trading standards team, this company has been punished for breaching a law that is intended to protect tenants.”
EYE NEWSFLASH: Leaders Romans Group acquires 15-branch Portico
Agents will simply not do the work to let a tenant leave early, there is no requirement to allow it.
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it was end of fixed term, so the *early surrender* does not apply. The agent should not have charged,
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It is a joint tenancy with the others wishing to stay, so there was no surrender with the tenancy continuing, even for the tenant that has moved out, who remains a tenant unless the parties agree to remove him/her from the contract; in which case, £50 for the paperwork to remove the outgoing tenant from the agreement is fair dinkum, but £195 is clearly a breach.
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If a tenant wants to move out of a property after the fixed-period has ended, surely he can’t be prevented from ending the contract, or be charged a ‘fine’? Wouldn’t the remaining tenants need to form a new tenancy agreement with the landlord, or find alternative accommodation?
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The issue is one tenant wanting to leave on the expiry date of the fixed term, but in a joint tenancy, one tenant cannot simply wash their hands of any responsibility as will still be a party to the joint tenancy. To end a joint tenancy during or at an end of a fixed term, all tenants must agree to the ending of the tenancy. The ones that want to continue renting the property will need to agree a new tenancy.
In a joint tenancy, if one tenant wants to end a tenancy in a statutory periodic tenancy, they (the tenant that wants to leave) can serve notice to quit to end the tenancy for all joint tenants. The tenants that want to remain, will need to agree new terms to create a tenancy for the remaining tenants.
If I understand you correctly, you are saying the tenant can simply serve the required notice to end the tenancy once in a statutory periodic, so no tenant fee should be applied as they are simply exercising their right to end the tenancy. This would be the case, but then rent would be due for the period beyond expiry of the fixed term, which will be far higher than £50!
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the joint tenants have agreed to a fixed term. The fixed term has ended, and one joint tenant has said they will leave. You cannot hold them to the contract, which in theory no longer exists. Section 5 HA 1988 creates a stat periodic, but only where its the same tenant and landlord. (its no longer the same tenant)
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You can hold all the joint tenants to the contract until the joint tenancy is ended; and the one opting to vacate by expiry of the fixed term does not change that.
Assuming the tenancy is silent on how the tenancy is to continue after expiry of a fixed term, a SPT is created a day after expiry of the fixed term with all the joint tenants even if only one of the joint tenants remain in occupation.
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Thanks for taking the time Bosky to explain, but my understanding differs to your explanation.
Once a tenancy is ended by a tenant (as opposed to the landlord), anyone who remains in the property will be classed as a trespasser. The landlord can then claim mesne profits for as long as the trespassers (aka, remaining tenants) occupy the property. The tenant who moved out would have no liability after the end date (so long as written notice is served correctly).
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The question here is whether one tenant in a joint tenancy can end a tenancy.
Within a fixed term, all tenants must jointly serve NTQ to end a tenancy, but only one tenant is required to serve NTQ to end a joint tenancy within a SPT.
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Tenant’s in the uk go on about unfair fees, well in Europe tenants still pay fees and in Italy for example they have to pay to the agent a fee equivalent to at least a months rent to the agent. For managed properties tenants have to pay 12% plus VAT monthly to the agency.
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Tenants in Italy may not care about the fees as much, as the rents are close to half the price of what they are over here.
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