Fees for Renewing Tenancies with Letting Agents

Introduction

When a tenant’s fixed-term lease ends, landlords often have the option to renew the tenancy agreement instead of finding new tenants. Letting agents typically charge fees for handling the renewal process, which can vary based on the agent and the level of service provided.

Understanding tenancy renewal fees can help landlords make informed decisions about whether to extend a tenancy, negotiate costs, or explore alternative options.

Table of Contents

1. What Are Tenancy Renewal Fees?
2. What’s Included in a Tenancy Renewal?
3. How Much Do Letting Agents Charge for Renewing a Tenancy?
4. Who Pays for Tenancy Renewals?
5. Are Tenancy Renewal Fees Mandatory?
6. How to Avoid or Reduce Tenancy Renewal Fees
7. Frequently Asked Questions (FAQs)
8. Next Steps

What Are Tenancy Renewal Fees?

Tenancy renewal fees are charges letting agents apply when renewing an existing lease agreement between a landlord and a tenant. These fees cover administrative tasks such as updating contracts and ensuring legal compliance.

What’s Included in a Tenancy Renewal?

Letting agents typically handle the following as part of the renewal process:

• Drafting a New Tenancy Agreement: Updating terms, rental amount, and tenancy duration.
• Negotiating with Tenants: Communicating with tenants regarding rent adjustments or contract terms.
• Legal Compliance Checks: Ensuring the new agreement complies with current regulations.
• Deposit Reconciliation: Reviewing and adjusting the tenancy deposit if needed.
• Issuing Renewal Notices: Sending official notices to tenants about renewal terms.

How Much Do Letting Agents Charge for Renewing a Tenancy?

Letting agent fees for tenancy renewals vary but typically fall within the following ranges:

• Fixed Renewal Fee: £50 – £200 per renewal.
• Percentage-Based Fee: 5% – 10% of the annual rent (for fully managed properties).
• No Renewal Fee: Some agents do not charge a renewal fee if they are already managing the property.

Who Pays for Tenancy Renewals?

Since the Tenant Fees Act 2019, tenants in England cannot be charged renewal fees. The cost must be covered by the landlord if the letting agent applies one.

Are Tenancy Renewal Fees Mandatory?

No, tenancy renewal fees are not always required. Some landlords prefer to let the tenancy roll into a periodic tenancy, which continues on a month-to-month basis without needing a formal renewal. However, a new agreement may be necessary if:

• The rent is being increased.
• The tenancy terms need changes.
• The landlord prefers a fixed-term lease to maintain stability.

How to Avoid or Reduce Tenancy Renewal Fees

• Negotiate with Your Letting Agent: Some agents may waive or reduce fees if you challenge them.
• Choose a Letting Agent Without Renewal Fees: Compare agents and their fee structures before signing a contract.
• Use a Periodic Tenancy: Avoid formal renewal fees by letting the tenancy continue on a rolling basis.
• Self-Manage the Renewal: Landlords can handle renewals themselves by providing a written agreement without agent involvement.

Frequently Asked Questions (FAQs)

Can I avoid paying tenancy renewal fees? Yes, by negotiating with the agent, switching to a periodic tenancy, or handling the renewal yourself.
Are letting agents allowed to charge tenants for renewals? No, under the Tenant Fees Act 2019, tenants cannot be charged for renewals in England.
Is a new tenancy agreement required for every renewal? Not always. If both parties agree, the tenancy can continue on a rolling basis.

Next Steps

Understanding tenancy renewal fees allows landlords to decide whether to renew a lease or explore alternative options. If you need expert property management services, compare top-rated letting agents today.

For more insights on letting agent fees, visit Letting Agent Fees Explained

For expert property management services, visit FindLettingAgents.co.uk