This is a question to the blog clinic from John who is a tenant.
My agent wants me to sign a new tenancy with the only change being this new clause:
“at the end of the initial term of this tenancy as stated in this tenancy agreement, the tenancy agreement will be renewed for a six month term, subject to a review as to how the tenancy has been conducted, and the tenant hereby agrees that on granting of the new tenancy agreement a fee will be payable by them in the sum of £100.00 plus VAT.”
This is the only change and is effectively increasing the living cost of renting this property by £20 a month, (rent by stealth) do i have to sign this as i have been a tenant for more than 6 months.
Do I have to sign this or do i face eviction if I don’t sign?
All assured shorthold tenancies will be renewed automatically under section 5 of the Housing Act 1988 if the tenant stays in occupation, as a periodic tenancy. Usually, if the rent is paid monthly, this will be a monthly periodic tenancy. (You can find out more about periodic tenancies here).
The agents cannot change the law and make this conditional upon the tenant satisfying a review of ‘how the tenancy has been conducted’. It is likely therefore that this particular clause will be invalid under the Unfair Terms rules.
So after your fixed terms ends you will have a tenancy – if you remain living in the property.
The fee seems to be linked to signing a new fixed term tenancy agreement. At the moment this is not illegal and a clause imposing this may well be enforceable (although this particular clause may not because of what else it says).
This is unlikely to remain the case however as the government is intending to ban this sort of fee.
With or without the clause
So the situation is that after the end of your current fixed term tenancy you will get a periodic tenancy automatically. If you sign this new fixed term tenancy agreement, the agents will then require you to pay £100 if at the end of that tenancy, you sign a new agreement (assuming the fee ban has not come into force by then – which it probably won’t).
Although this particular clause may be void, there is nothing to stop the agents from refusing to give you a new fixed term anyway if you don’t pay the fee. Many agents do this.
The £100 payment, by the way, is not rent. It is a fee. Which is different.
For example, it cannot count towards rent arrears if you are being evicted for non-payment of rent. It also highly unlikely that the landlord will ever see it (and he probably doesn’t even know that the agents are adding this charge to the tenancy agreement).
The risk of eviction
If you don’t sign, technically, you could face eviction – a landlord can always serve a section 21 notice on a tenant and seek to end the tenancy after the end of the fixed term.
However you are legally entitled to remain in the property until the landlord has obtained a court order for possession – and the decision whether or not to go to court is not the agent’s decision. It’s down to the landlord. Letting agents are not entitled to evict you themselves.
Letting agents are simply the landlord’s representative (they are not ‘your’ agents, they act for the landlord). It is doubtful whether any landlord will be willing to incur expensive eviction proceedings to evict an otherwise good tenant simply because the tenant did not want to pay a renewal fee to the agents – which fee would not benefit him personally.
So refusing to sign will not inevitably lead to eviction. In fact, realistically, it is unlikely to lead to eviction. But at the moment, most tenants tend to pay the fee rather than face that risk.