Change of Tenant Fees for Rentals. You might be eligible for a refund

So does this mean that a real estate agent who makes paying by direct deposit compulsory and then charges an admin fee for these transactions is breaking section 15?

Property Manager said :

What happened with the agency in question (as best I can understand what has been circulated by OFT to all agents) is that they were charging tenants a fee to effect a change of tenancy when it was subject to a periodic lease. This is where the clause of “tenants not to bear costs other than rent and bond” is applicable as the tenants were not breaking any contractual obligations as a result of this change.

Fixed Term = you pay
Periodic = you don’t pay

This may be the case.

My opinion of real estate agents has not been diminished by this experience, it could not get any lower.

Property Manager said :

Let me clarify this for everyone before you end up in a mis-informed meltdown…

Nice clarification. Thanks.

My old Property Manager only required me to send an email advising that I was leaving the property and the lease didn’t have to be changed at all.

Maybe that was illegal …. or maybe he was nice. Who knows?

Let me clarify this for everyone before you end up in a mis-informed meltdown…

The first thing to understand is that a Tenancy Agreement (residential lease) is a legal contract. Once the terms of this contract are agreed to, neither party can make changes to the existing agreement. For any change to be made, the parties must agree to a new contract that will supersede the existing one.

The other thing you need to know is the difference between a FIXED TERM TENANCY and a PERIODIC TENANCY. A fixed term is, as the name suggests, an agreement between the owner and the tenant for a specific period of time. This means that if a tenant wants to terminate the tenancy before the end of that period they are contradicting the terms of the contractual arrangement, or, as is the common term, breaking their lease.

A periodic tenancy offers all the same rights and responsibilities except that no party is bound by specific dates. This means that the tenants can end the lease by giving three weeks notice, without any penalty.

The Residential Tenancies Act stipulates quite clearly that if a tenant breaks their lease during a fixed term the owner is entitled to recover costs (for advertising and administration) that would otherwise have been avoided (up to a limit equal to one week’s rent). This means that any advertising or agent fees the owner would not have had to pay if you weren’t breaking your lease are to be reimbursed by the tenants. See sections 62 and 84 of the Residential Tenancies Act.

In the instance that tenants “simply want to swap names on the lease”, you are actually seeking to end the current tenancy (contract) and supersede it with a new agreement under new conditions. If this occurs during a fixed term tenancy you would be liable to reimburse any administration fee that the owner would incur for this to be processed – you are breaking the original lease to effect this change, so you have to reimburse costs the owner would have avoided if you weren’t doing so.

What happened with the agency in question (as best I can understand what has been circulated by OFT to all agents) is that they were charging tenants a fee to effect a change of tenancy when it was subject to a periodic lease. This is where the clause of “tenants not to bear costs other than rent and bond” is applicable as the tenants were not breaking any contractual obligations as a result of this change.

Fixed Term = you pay
Periodic = you don’t pay

Good on you, I’d recommend chasing up all the money they’ve bilked you for over the past 4 years, and be wary of them trying to short-change you.

Hang on….

Does that mean its illegal to charge that ridiculous lease preparation fee???