Latest Tribunal case highlights dangers of over-charging for tenancy changes
Letting agency in Oxford took a prohibited payment and fell foul of the Tenant Fees Act 2019 - and has now been ordered to give the cash back, judge heard.
Lettings agent Mark Rawlins of Letting 4 Oxford has been ordered to pay tenant Stephanie Haynes £111.60 after Tribunal Judge Wayte found that he had overcharged her under the Tenant Fees Act 2019.
At a virtual first-tier tribunal – which Rawlins did not attend – Judge Ruth Wayte heard that Haynes entered into a 12-month joint assured shorthold tenancy in September 2021.
In or about March 2020 Haynes arranged for someone to replace her and once he passed the credit check she agreed a move-in date of 5 April 2022.
CHANGE TO TENANCY
On 30 March 2022 the Rawlins emailed Haynes saying that he required £170 in respect of their fee for the change to the tenancy; made up of £50 for a change to the tenancy documentation, £50 for changes to DPS certification, £23.40 plus VAT for the credit checks and agency costs at £35 per hour plus VAT.
The fee would need to be paid before Haynes replacement could be checked out and the new tenant checked in. Haynes responded that she was surprised by the fees, particularly considering the recent legislation.
However, she was keen to avoid problems with her deposit and therefore made the payment on 1 April 2022. The change to the tenancy took place on 5 April 2022 as agreed.
Haynes she had rung the respondent to query the fee and ask what costs he had incurred to justify the amount. The only cost she was aware of was £23.40 plus VAT for the credit check.
A set fee of £50 for re-issuing the contract is not acceptable.”
Judge Ruth Wayte ruled: “The Guidance on the 2019 Act for landlords and agents is clear that if a tenant has found a suitable replacement tenant, it is unlikely that a fee above £50 can be justified and that any costs above that amount should be evidenced.
“The applicant accepts the cost of the credit checks at £23.40 and I consider that 1 hour at £35 per hour would be ample to go through the steps set out in the tenancy agreement and email.
“A set fee of £50 for re-issuing the contract is not acceptable. In the circumstances I consider that the permitted payment in this case is £58.40 including VAT (I note there is no reference on the tenancy agreement to VAT). This means that the respondent must return £111.60 to the applicant.”
Letting 4 Oxford has been approached for comment.
Read the Tribunal decision in full.
Well there’s a lesson learnt. Changes of tenancy are a lot of hassle not mention of the Right to Rent check and any inventory related changes/agreements. If its not cost effective for the agent to do it for little more than £50 perhaps wording the tenancy agreement that any changes to the agreement during the fixed term will be carried out by a solicitor for the landlord, the tenant being responsible for those costs which will probably be several hundred pounds plus vat. So why is it that an agent’s time is so cheap!
Anyway all a moot point as when fixed term tenancies are banned tenants will be able to give a months notice at anytime and the landlord will be stuck with finding a new tenant or in the case of joint tenancies when a tenant leaves doing all of the change over FOC to the tenant