|[dropcap style=”font-size: 60px; color: #2bbe22;”] L [/dropcap]et me start by stressing that I have no legal qualifications, I’m not a legal professional in any shape or form, but I am a landlord and have had Letting Agents try to take money from me for contract renewals that wasn’t necessary.In this article I simply want to share some of my experiences on how letting agents have tried to get money from me, and even our tenants when I wouldn’t pay, by charging for unnecessary contract renewals.
What I’m referring to is a feature of the standard Assured Tenancy Agreement (AST) Letting contract (used for property letting arrangements in the UK) called the “Rolling Contract”.
In most cases a landlord and tenant would agree an initial term of property occupancy, usually 6 or 12 months. At the end of that term, the letting agent will often then try and “re-sign” the tenant for another 6 – 12 month period assuming they wish to continue to live in the property. By doing this, the letting agent creates the need to charge you a new contract fee, often a month’s rent.
However, there is no need to do this, as there is a feature in the standard AST that allows for the contract between you and the tenant to continue on a rolling basis, which as I said makes your agreement a “Rolling Contract”.
The Rolling Contract feature comes into play automatically after the fixed term of the AST expires if the tenant continues to occupy the property. What this means is that the tenant is still obliged to continue to pay you your monthly rent as before, but now only with a monthly commitment. The tenant can now, and must, give you a full month’s notice should they intend to vacate the premises, or they are obliged to pay for the next full month.
As the landlord, your obligation would be to give the tenant 2 months notice if you wish them to vacate the property.
All this takes place, without any further charges to you or the tenant.
To be clear, if you want to sign the tenant up again for a longer period e.g. 6 to 12 months, and the tenant is in agreement, then you can. Some landlords and tenants prefer this as it creates a longer more guaranteed commitment to each other. But it’s not mandatory as you might be led to believe. I have tenants who’ve been in properties for years following the initial 6 month agreement and have paid every month without fail.
It is a matter of preference for you and the tenant, rather than just another reason for the letting agent to charge you a fee. In fact, I once had a letting agent contact the tenant to ask them to pay to renew an AST contract when I wouldn’t; which is totally inappropriate. And in another case, the agent tried to convince the tenant that they should demand a fixed term contract from me, forcing me to renew and pay the fee, by trying to scare them into thinking that I might kick them out with only 2 months notice.
Now I’m not suggesting that this is commonplace practice and I understand we’re all in this game to make a buck, so I can’t blame them for trying, but we want you to know what options you have available, so you can make informed decisions.
Remember every months rent that goes into your pocket instead of the Letting Agents’ is pure profit, and we like profit.
Again I’ll stress that these comments at based on my opinion ONLY at time of writing. They should never be taken as correct or factual without confirmation from a legal professional and are given without prejudice or liability.
Brian Conway, SC Properties