My agent is trying to charge me for 'marketing' and 'reference checks' even though the tenant stayed on from the previous year. Can I challenge these extra fees, or do I just have to stomach it?
Quick Answer
Landlords can challenge agent fees for 'marketing' and 'reference checks' on a tenancy renewal, as these services are usually unnecessary. The Tenant Fees Act 2019 primarily restricts fees to tenants, not those charged to landlords by agents.
## Understanding Agent Fees on Tenancy Renewals
The Tenant Fees Act 2019 restricts what fees can be charged to tenants in England, but the relationship between a landlord and their letting agent is governed by the agency agreement. The legality of an agent charging for 'marketing' and 'reference checks' upon a tenant's renewal hinges entirely on the specific terms agreed upon in your signed agency contract. For instance, a contract might specify a 'renewal fee' that covers administrative costs, but explicitly charging for re-marketing and re-referencing an existing tenant is generally not standard practice when a tenant simply extends their current tenancy, as these services are usually associated with sourcing a new tenant. Landlords should also be aware that the Bank of England base rate is 4.75% as of December 2025, which impacts overall property financial models, making any unjustified fees more impactful.
### Can Landlords Challenge Agent Renewal Fees?
Yes, landlords can challenge renewal fees if they appear disproportionate or do not reflect actual services rendered, especially when a tenant carries over from a previous year. The primary step involves reviewing the signed agency agreement to determine if these specific charges are outlined. If the contract is vague, or if it explicitly charges for re-marketing and re-referencing for an existing tenant, it may be possible to dispute this. Councils can charge up to 100% Council Tax premium on furnished second homes from April 2025, which increases landlord holding costs, making it more critical to scrutinise every outgoing expense.
However, some agents structure their fees as a percentage of the rent for the management period, which remains payable regardless of whether a new tenant is found or an existing one renews. For example, if an agent charges 10% of monthly rent for management, and the property attracts £1,000 pcm, the annual fee is £1,200. An additional £200 charge for 'renewal services' on top of this would require clear justification in the contract.
### Scenario Cases for Challenging Renewal Fees
1. **Directly stipulated fees:** If your contract states a fixed 'renewal fee' for tenancy extensions, such as £150, this is typically binding if the service is administrative. Challenging an agreed-upon fixed fee without a material breach of contract by the agent is difficult.
2. **Itemised 'marketing' and 'referencing' for existing tenant:** If the agent provides an invoice with specifically itemised charges for 'marketing' (e.g., £75) and 'reference checks' (e.g., £50 per tenant) for a tenant already residing in the property, this should be challenged. These services are typically used for finding and vetting *new* tenants, not for renewing an existing agreement.
3. **Proportionality of the fee:** If the agency agreement details a renewal fee that seems excessively high for purely administrative tasks (e.g., £400 for existing tenants), it may be possible to argue it's an unfair term, though this often requires legal interpretation of contract law rather than simple dispute.
## Potential Charges for Landlords to Watch For
* **Unclear renewal fees:** Vague terms like 'administration fees' for renewals that do not specify the services covered.
* **Duplication of services:** Charging for services that haven't been performed or are not required, such as re-marketing a property that is already occupied by a renewing tenant.
* **Exit fees:** Fees for ending the agency agreement, which should be clearly outlined and reasonable given the work involved.
## Steve's Rule of Thumb
Always scrutinise your agency agreement before signing, and if you cannot understand a term, request clarification or legal advice before committing to it. Ensure any renewal fees are proportional to the actual work undertaken, especially for existing tenancies.
## What This Means For You
Understanding your agency contract is critical to managing your costs effectively. Unjustified fees can erode rental yields, which are already under pressure from factors like the increased 5% SDLT surcharge on additional dwellings from April 2025 and higher BTL mortgage rates typically between 5.0-6.5%. Property Legacy Education helps investors understand these contractual nuances and identify hidden costs before they impact profitability rather than after.
Steven's Take
Many landlords overlook the detail in their agency agreements, often focusing solely on the monthly management percentage. However, it's frequently the smaller, less frequent charges, such as renewal fees, that can add up and impact cash flow. I've seen landlords effectively pay for services they didn't need or receive simply because they didn't challenge an ambiguous clause. A renewal with an existing tenant should primarily be an administrative task, not a re-marketing or re-referencing exercise. Always ensure your agent is transparent about what services each fee covers.
What You Can Do Next
1. Review Your Agency Agreement: Locate and thoroughly read the agency agreement you signed with your letting agent. Pay close attention to clauses detailing 'renewal fees', 'marketing fees', 'referencing fees', or any 'administrative charges' for tenancy extensions. Understand what services these fees are meant to cover.
2. Request an Itemised Breakdown: Ask your agent for a detailed, itemised invoice for the charges in question. If they are charging for 'marketing' and 'reference checks' for an existing tenant, ask for clarification on why these specific services are necessary for a renewal and what work was actually performed.
3. Challenge the Fees Formally: If you find discrepancies or believe the charges are unjustified based on your contract and the services rendered, write a formal letter or email to your agent disputing the charges. Clearly state your reasons, referencing relevant clauses in your contract or the absence thereof. Seek advice from Landlord Zone forums for common practices or Citizens Advice Bureau (citizensadvice.org.uk) for general consumer rights.
4. Seek Legal Advice or Use Redress Schemes: If the agent refuses to budge and you still believe the fees are unfair or in breach of contract, consider seeking legal advice from a contract lawyer. Alternatively, check if your agent is a member of a property redress scheme (e.g., The Property Ombudsman or Property Redress Scheme) and consider escalating your complaint through their official channels.
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