united-kingdom contract-law rental-property fees tenancy-rules
UK - Joint Tenancy - Renewal/Replacement Tenant Fee
<p>A fixed-term 6 month joint AST agreement ends in April 2020. The agreement had three tenants listed on it. One tenant is leaving (former tenant) two are remaining. </p>

<p>The former tenant notified the Letting Agent 2 months prior to the tenancy agreement ending that they would be leaving the property. The two remaining tenants have found a replacement tenant and notified the Letting Agent that they had found a replacement tenant.</p>

<p>The Letting Agent has requested the new tenant pay a "Tenant Replacement Fee". The new tenant queried this as the Tenant Fee Act 2019 permits letting agents to charge up to £50 for a "variation, assignment or novation of a tenancy", however as the agreement ends prior to them moving in, they feel that this does not apply and that it is classed as a tenancy renewal. The Letting Agent says they can charge thebfee regardless of the tenancy ending as the former tenant is being replaced.</p>

<p>Under the Tenant Fee Act 2019 a Letting Agent can not charge fees for setting up nor renewing contracts.</p>

<p>Is the tenant or the Letting Agent correct? Is a Letting Agent permitted to charge a "Tenant Replacement Fee" at the start of a new contract?</p>

<p>In my non-expert opinion, I believe the letting agent is correct.</p>
<p>As far as I can tell, a <strong>renewal</strong> is limited to making a new tenancy agreement with the same tenants. From <a href="https://england.shelter.org.uk/housing_advice/private_renting/letting_agent_fees_for_tenants" rel="nofollow noreferrer">Shelter's website</a>:</p>
<blockquote>
<p>Changing or assigning your tenancy</p>
<p>You can be charged £50 if you want to change a term in your tenancy or <strong>assign it to someone else</strong>. The landlord can only charge above this if they can prove it cost them more.</p>
</blockquote>
<p>I've been unable to find a clear definition of the term &quot;renew&quot;, either in legislation or in the official guidance. However, it appears to be consistent with the definition of &quot;replacement tenancy&quot; in <a href="http://www.legislation.gov.uk/ukpga/1988/50/section/21" rel="nofollow noreferrer">section 21 of the Housing Act 1988</a> (as amended):</p>
<blockquote>
<p>(7) For the purposes of this section, a replacement tenancy is a tenancy—</p>
<p>(a) which comes into being on the coming to an end of an assured shorthold tenancy, and</p>
<p>(b) under which, on its coming into being—</p>
<p>(i) the landlord and <strong>tenant</strong> are the same as under the earlier tenancy as at its coming to an end, and</p>
<p>(ii) the premises let are the same or substantially the same as those let under the earlier tenancy as at that time.</p>
</blockquote>
<p>So as with the implied definition of &quot;renewal&quot;, a change of tenant results in a new tenancy, not a replacement of the old one.</p>
