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Question Title: Reletting Fee
| Question: 258 |
| This year, we took over the management of a tenanted property from another agent. The house in question was let to four students at a monthly rent of £1350 per month. Mid-way through the tenancy, two of the tenants wished to leave. The remaining two have offered to find suitable replacements to take their place but the landlord is demanding a reletting fee. Under the tenancy agreement drawn up by the previous managing agent, it states that the tenants agree to pay a reletting charge of 5% of the annual rent - which in this case would amount to a one-off charge of £900. We do not think that this is fair - especially bearing in mind that the two suitable replacement tenants have been found by the tenants themselves, and we will therefore incur no re-advertising fees. Is it legal to make such charges ?
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| Answer: |
| The reletting fee that you describe is indeed a hefty charge for what is a reasonably common situation. Given the relatively minor work involved in checking references and redrafting a new tenancy agreement for the new group, it is also unlikely that it reflects the true cost to the landlord of making the necessary adjustments to the tenancy. In law, a court would probably look on such a clause as a penalty clause. Penalty clauses are rarely enforceable (even if agreed in advance) when the sum payable does not fairly reflect the cost of remedying the original breach (of contract). In this situation, the reletting charge clearly does not reflect the costs incurred by the landlord or his agent, and this charge would most likely be deemed a penalty. The tenant could apply to have the clause declared void and struck out of the agreement.
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References:
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Pages:
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Hyperlinks:
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Letting Handbook |
Chapter 17 |
letting-handbook-and-factsheets.html
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For more information, discuss on the Forum
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