Letting Agent Was Unable to Charge Renewal Commission

Letting agents claiming renewal commission from landlords without doing any work for the money had their case kicked out of court by a judge.

Cosway Estates of Mill Hill, North London, wanted to charge a 6.5% renewal commission when tenants signed up for another term at a buy to let maisonette for a seventh year even though they did not negotiate the deal or provide any paperwork.

That meant the landlords would have to fork out £1,123 charged as the agreed percentage plus VAT of the £14,040 annual rent for the property.

The contact with Cosway Estates had already seen the landlords pay 7% commission on the initial let and 6.5% for each following year.

At the last renewal, the landlords negotiated the rent and completed the tenancy agreement.

Cosway Estates did not manage the property, collect rent or complete any work relating to the renewal.

The firm claimed the commission was due as the contract entitled them to claim if any of the original tenants remained on the property.

The claim was dismissed at Willesden County Court as the judge felt the renewal terms should have been highlighted on the first page of a fee agreement with the landlords.

John Miller, of solicitors Miller Clayton, Stanmore, Middlesex, who acted for the landlords, said: 

“In my opinion, it is unreasonable and unfair for agents to charge a renewal commission at a percentage near to the percentage charged on the initial letting after the fourth year of renewal, especially if they had not carried out any work towards completion of the renewal terms.

“Even if they did, only a reasonable administration fee should be charged.”

As a county court case, the judgment is not binding on other courts.