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Agency strongly defends £3,600 charge to departing tenants

A London lettings agency has described a £3,600 charge to a tenant as “entirely reasonable and legal.”

The i newspaper has featured a story of a professional couple reportedly told they must pay London agency Dexters over £3,600 to end their two year rental agreement after just eight months.

Lecturer Jamie Woodcock signed with Dexters in February this year for a two-year rental, and notified the agency on September 3 that the couple would be vacating the flat. 

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At the time they were warned they would be liable for a charge and have since been told this will be £3,230.64 for outstanding landlord fees made up of 11 per cent of the total rent for the remaining 14 months of their tenancy, plus a VAT charge of 13.2 per cent. Other administrative charges take the total to £3,602.18.

Dexters says it has conformed entirely with the Tenant Fees Act, with every charge being directly a cost; indeed, it says the landlord could have insisted on higher costs.

A spokesman for Dexters has told Letting Agent Today: “These customers made a two year commitment to the landlord, then wanted to cut that short in order to buy a property. The market for these flats in central London has changed considerably since February and they expected the landlord to break the lease, shoulder the costs of finding a replacement tenant and to now accept a lower rent. 

“When the landlord agreed to cover the difference in rent, they then unfairly decided to focus on Dexters charges to the landlord, the implication being that perhaps we shouldn’t charge anything to start again and go through the whole process of re-letting the flat. 

“The best analogy for this is taking a two year lease on an expensive car and then shortly afterwards wanting to hand it back, expecting someone else to pick up the costs and hassle.

“We are sorry these customers feel hard done by because we and our landlord have bent over backwards for them. We are supporters of the restrictions on charges to tenants, however costs like these aren’t covered by that law and indeed it is the landlord that is suffering through the tenants unrealistic expectations.”  

The newspaper says the fee was calculated from the monthly rental payments the couple would have made, covering the landlord’s payment to the agency for letting the property.

Woodcock told the i: “We would be happy to pay our rent until a new tenant is found, as well as any reasonable costs for re-letting the property. However, Dexters have asked us to pay the ‘penalty’ once a new tenant has been found, until the ‘end’ of our tenancy in 2022.”

He continued: “This £3,200 sum covers the losses incurred by the estate agent. Dexters would be receiving rent from a new tenant – which would include this fee – as well as this fee from us.”

Later in the story the tenant adds: “I’m not working for minimum wage. If the worst came to the absolute worst, we could pay. But for anyone, £3,600 is a lot of money. It’s been very stressful. I’m concerned that there are people who are not able to pay these fees are being asked to pay them.

“It is worrying that many people may be subjected to these kinds of charges as they may have had to leave properties during the pandemic … I’m confident to argue with an estate agent to get legal advice and all these kinds of things. But a lot of people don’t have the time or the resources to argue, and might pay the charges."

  • jeremy clarke

    So tenants think that they can just break a contract when they feel like it irrespective of the consequences? What if the landlords had tried the same, would the tenants have just said that was fine and walked away? Suggest that the tenants try the same with Sky and Vodafone and see how they get on, I hope the agency gets every penny and actually believe that the landlord should receive full compensation.

  • Roger  Mellie

    I agree with Jeremy Clarkson, there is nothing out of order here. If the tenant wants to break the contract they will have to pay the landlords out of pocket costs. If these tenants are unhappy, maybe they should be unhappy with the government who also allowed them to pay no fees when they moved in.

  • Mark Wilson

    I don't think agents can win in the public's eye. Penalties are however unpopular and if this becomes common practice it will be outlawed. Sweep stake on that if anyone is interested.

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    As an agent, and landlady, I see this so very often these days. Tenants seem to think the tenancy agreement is optional or something you jusy quickly sign to get the keys and they can just back out whenever they want. The governmnet is embolding them and they think that rules only apply to the landlords (and God forbid you break them) but the tenants can take a very liberal view on them and find rules unfair. This was not the case only 5 years ago and certainly very rarely before that.

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    He is a lecturer. That makes everything clear and no more needs to be said.

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    With all the things we have to put up with these days now they want Hotel rules for them to leave and never ending notice and court appearance if we want tenants to leave . They should pay I’m sure the contract they signed was clear.

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    It really is quite simple. The Tenant pays the full rent for contractually obligated period.
    No doubt that would cost the Tenant a large 5 figure sum.
    So, in conclusion, the Agent is helping this Tenant save a small fortune and gets pilloried for it.
    May I politely suggest to the lecturer that he needs a lecture in contractual obligations...not to mention basic economics. What a fool.

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    I think the point here is not necessarily that they are disputing the rent that is due, more the point they are expected to pay the agents letting fee.
    On the basis that the agent relets the flat, they will then be paid again and as such the agent will have been paid twice for the same period.
    Of course one may argue that the landlord could have to take less rent from the new tenant, that may be the case, but I can't imagine they would see a problem had the market rent increased and they were then to achieve a higher rent for the landlord.

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    They have to do the work twice and therefore should be paid twice. If they just do it once then the Tenant pays for the period they are contractually obligated for. Period.
    All the Agent is doing here is trying to help the Tenant and save the Tenant money. Anything else is actually costing the Agent money and you can't suggest that is appropriate surely?

     
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    In reality they are not doing the work twice as pro rata they will still have been paid for the work they have done were the fee calculated monthly.
    I'm not for a minute suggesting that tenants should be able to up sticks and leave whenever they want, more the fact that should they really be liable to pay the entire remaining fee? In that case it really would be that the agent is being paid twice.
    I think the question to be asked is did the tenant really want a 2 year contract and did the landlord? Certainly it would suit the agent if they were to charge the entire 2 years in advance...

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    Very difficult to qualify the fee when we do not know what the rent is here.
    Also, perhaps the Landlord gave the Tenant a better deal for the commitment of a longer let? All very possible, but hardly likely to be reported by the Tenant in their ‘complaint’.
    Agents fees are heavily loaded up front now because that’s where the outlay is. Marketing, viewings, negotiation, referencing, compliance, et al.
    To me this is simply false outrage by the Tenant who would have negotiated this release agreement with the Agent/Landlord; only to bleat about it afterwards.
    Is it fair to pay a mortgage redemption penalty to a mortgage company for an early redeemed mortgage? No?....well don’t redeem then.
    We will have to agree to disagree on this one Ben.
    It’s my view the Tenant is very lucky to have such an accommodating Landlord & Agent in the first place when they could have rightly just said, sorry, but the contract is the contract and you owe rent for the full period.

     
  • Algarve  Investor

    Doesn't do the stereotype of greedy agents and landlords any good, even if the situation is more nuanced than it seems. Does sound like an excessively high amount of money and a rather clever bending of the rules surrounding the Tenant Fees Act. I wonder how much that goes on?

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    Let’s say the rent for argument’s sake in £2000 pcm.
    If the tenant has left 1 year early the Agent has actually saved the Tenant £20,400!!
    Again I reiterate, the Tenant had a choice. Simple

     
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    • 27 November 2020 10:55 AM

    Good on Dexter's. They should have taken the rest of the whole tenancy.
    A landlord cannot break the contract, so why are they allowed to?

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    Here's another solution, the landlord could simply refuse to release them from their contract. Then they'd be liable to pay a lot more. If you want out of a contract, you pay the penalties.

  • Kristjan Byfield

    It's simple- a contract is a contract. To break a contract will almost always incurr costs and no party is obliged to dissolve an agreement. The Tenants should have contacted their agent prior to starting a property search to buy to understand what their position and possible ramifications were. If they lept to take advantage of the SDLT holiday- the likelihood is they have saved around £15k on it so a cost of £3600 still leaves a substantial saving on purchase costs. The expectation for Landlords to 'take it on the chin' or, indeed, for an agent to go through a complete new lettings process for effectively no remuneration is unjustified but a common gripe. It appears agents or landlords wanting to reneg on contracted terms are being greedy and/or evil- but when a tenant wants to break contract- anything other than immediate lease without any charges leaves us also deemed greedy and/or evil. It cant work both ways and its about time journalists reporting this crap had a basic understanding of contract law.

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