2 Barton Court, Pennyfields, Braintree Essex CM14 5LQ CAM/22UD/HTC/2025/0002
DECISION
[1]The Tribunal finds that none of the payments for which the applicant seeks repayment by the Landlords Agent under S.15 (3) (5) Tenants Fees Act 2019 (The Act), are Prohibited Payments or Holding Deposits. No sums are repayable. Background[2]The Tribunal received an application dated 6 September 2024 for the determination that various of prohibited sums be returned to the former tenant, applicant, under the Tenants Fees Act 2019. The applicant was a former tenant of the landlord of the Property. The respondent was the landlord’s agent. Directions[3]Directions dated 24 April 2025 were issued by Laura Lawless, without an oral hearing. They identified that the respondents were the landlord’s agent of the Property and the applicant a former tenant of the Property.[4]Under Directions Background paragraph No.3 (page 2) states in bold: “The tribunal does not have any jurisdiction in respect of deductions made from the tenancy deposit”.[5]Directions paragraph 2 required the respondent by 13 May 2025 to provide: “… a statement in reply explaining in relation to Paragraph 6 Schedule 1 of the Act whether the payments requested exceed the loss suffered as a result of the termination or whether the sum exceeds the reasonable costs and if they do why they should not have to refund some or all of the amount claimed by the applicant, together with copies of any documents to be relied on.”[6]Directions paragraph 3 allowed: “The applicant may then send a brief reply to the tribunal and the respondent by 27 May 2025 together with copies of any other documents on which the applicant relies.”[7]In the event, the Tribunal did not receive any requests for a hearing. The Tribunal determined the case on the application form, the lease of the Property and copy documents from both parties. The Tribunal received a combined bundle of documents from the parties, including the application form itself, of some 20No. double and 70No. single sided A4 sheets, referring to nearly 200No. emails sent between them including many duplicates. They were not generally arranged in any particular date order. 3 Applicant’s Case[8]The application Form, at box 3 invites the applicant’s provision of; ‘Details of Prohibited Payment or holding Deposit.” The applicant refers to two issues: 1. ‘Fee concern’ 2. ‘Holding deposit’.[9]‘Fee concern’: The applicant states that they were: “…compelled to pay fee towards marketing viewings tenancy agreement by the agency…to come out of the contract as I needed to move back to my family home. When asked for detailed breakdowns or cost, agency completely refused to provided details which I believe is unacceptable when they compelled me to pay this fee. I feel their attitude towards tenants is complete unreasonable and feel they treat tenants a money bag where they can demand anything unreasonable without providing any details.” 10.“Below is the fee I paid in addition to rent till the time I was a tenant. I would have be more than happy to cover any reasonable cost towards finding a tenant, however I feel below is extortionate, totalling £1392.00.[11]The applicant’s breakdown provided: Find a tenant fee (including marketing, viewings, tenancy agreement (three weeks rent). £900. Check out inventory £100. New tenants ingoing inventory £110. Referencing for each new tenant £50. VAT at 20% £232.[12]Although from the multiple correspondence, the timetable of events is confused it appears to the Tribunal that on 19 July 2024 the applicant emailed the agent asking for confirmation of the “breakdown of the fees”. This was a follow up to an earlier telephone call to the agent respondent. The applicant sought to move out “possibly in 2nd week of August” 2024.[13]On 22 July 2024 the agent confirmed by email, the fees. They are the same heads of cost and amounts as those the tenant referred to above.[14]Through a series of emails the applicant sought to minimise these costs by referring possible alternative tenants, and queries the difference in price between incoming and outgoing inventories. The issue of excessive costs was not raised.[15]The agency secured a new tenant with a requirement to move in on 20 August 2024 a week or so later than the date the applicant had originally sought. The applicant sought to have the landlord take the costs of the ‘surrender’ and new letting out of the tenant deposit of some £1442. The tenant enquires about leaving surplus furniture behind if there can be no charge for doing so. The agent confirmed it should be removed by the tenant on departure or its removal would incur a charge. 4[16]There were some final adjustments confirmed by emails between the parties as to the; the final move out date, the final rent payment date; the move in date for the new tenant the latter driving the whole timetable. It appeared to the Tribunal that the last day of occupation of the Property by the applicant was 18 August 2025 the day he posted the keys through the agent’s office postbox.[17]The applicant would like the return of the entire ‘Fee’ as he regards it as a “Prohibited Payment” under the Act.[18]‘Holding deposit’. The applicant states: “Agency is now holding my deposit based on cleanliness food smell etc…” As the Direction stated above, this Tribunal has no jurisdiction over the return or retention by the agent or landlord of any sums paid over as the tenants deposit to cover losses incurred by the landlord during the lease term. It is dealt with further below. The Tribunal can only act in respect of money paid over to the agent or landlord by the tenant prior to commencement with the aim of securing the tenancy. Respondent’s Case[19]The respondent’s case is set out in their letter of 2 May 2025. The respondent denies that any Prohibited Payments under the Act were levied by them, against the applicant. 20.The respondent states: “The payment reference relates to the tenants request for early termination of a fixed-term tenancy agreement. As permitted under the Act. Payment associated with early termination when initiated by the tenant are lawful provide they do not exceed the loss incurred by the landlord.” They continue: “… such fees are permissible provided they reflect actual losses and do not exceed the remaining rent owned under the tenancy.”[21]Timeline: 19 July 2024 tenant requests early release from the contract. It would otherwise end 9 March 2026. 22 July 2024 the agent confirms to the tenant that the cost to leave early would be £1392, failing which the tenant would be contracted to pay £8654.79 in rent to lease end. The tenant agreed to these charges in writing and to leave by 19 August 2025. Then from 23 July to 9 August 2024 final arrangements were agree and concluded with the tenant. 19 August 2024 the tenant had vacated 6 months and 20 days earlier than the fixed term date. 22.The respondent enclosed a copy of the surrendered lease of the applicant. It was dated and ran from 10 March 2024 at £1300 pcm for 12 months. It had been place for just over 4 months before the tenant sought a surrender. The tenant is entitled to seek a surrender but, the landlord is not bound to grant it. 5 23.The respondent provided a copy of their standard heads of business and unit charge basis to the Tribunal. The respondent showed in addition that their charges were ‘significantly lower’ than two other agents in Brentwood by providing copies of the standard item and charge rates from agents Keith Ashton and Beresford Adams. These showed charges for the same works at or above the rates levied by the respondent. The Law – references are to the Tenants Fees Act 2019 S.3 Prohibited and permitted payments: For the purposes of this Act a payment is a prohibited payment unless it is a permitted payment by virtue of Schedule 1. S.5 Treatment of holding deposit: Schedule 2 makes provision about the treatment of holding deposits paid. S.15 Recovery by relevant person by amount paid:(1) Subsection (3) applies where— (a)a landlord or a letting agent breaches section 1 or 2, as a result of which the landlord or letting agent, or a third party, receives a prohibited payment from a relevant person, and (b)all or part of the prohibited payment has not been repaid to the relevant person. (2)Subsection (3) also applies where— (a)a landlord or letting agent breaches Schedule 2 in relation to a holding deposit paid by a relevant person, and (b)all or part of the holding deposit has not been repaid to the relevant person. (3) The relevant S.15 Recovery by relevant person of amount person may make an application to the First-tier Tribunal for the recovery from the landlord or letting agent of— (a)if none of the prohibited payment or holding deposit has been repaid to the relevant person, the amount of the prohibited payment or holding deposit; (b)if part of the prohibited payment or holding deposit has been repaid to the relevant person, the remaining part of the prohibited payment or holding deposit. (4)Subsection (5) applies where— (a)a landlord or letting agent breaches section 1 or 2, as a result of which a relevant person enters into a contract with a third party, and (b)the relevant person has made a payment or payments under the contract. (5)The relevant person may make an application to the Firsttier Tribunal for the recovery from the landlord or letting agent of the amount of the payment or (as the case may be) the aggregate amount of the payments that the relevant person has made. AND (9)On an application under subsection (3) or (5), the First-tier Tribunal may order the landlord or the letting agent to pay all or any part of the amount or (as the case may be) the aggregate amount referred to in that subsection to the relevant person within the period specified in the order. 6 24.Schedule 1 lists “Permitted Payments” – payments that may be made to the landlord. Any payment not listed here, is not Permitted. 25.Schedule 1 Para. 2 “Tenancy deposit” 2(1) A payment of a tenancy deposit is a permitted payment.(2) In this Act “tenancy deposit” means money intended to be held (by a landlord or otherwise) as security for— (a)the performance of any obligations of a tenant, or (b)the discharge of any liability of a tenant, arising under or in connection with a tenancy.(3) But if the amount of the tenancy deposit exceeds— (a)the amount of five weeks' rent, where the annual rent in respect of the tenancy immediately after its grant, renewal or continuance is less than £50,000, or (b)the amount of six weeks' rent, where the annual rent in respect of the tenancy immediately after its grant, renewal or continuance is £50,000 or more, the amount of the excess is a prohibited payment. 26.Schedule 1 Para. 3 “Holding deposit” 3(1)Subject to sub-paragraphs (3) to (6), a payment of a holding deposit is a permitted payment. (2)In this Act “holding deposit” means money which is paid by or on behalf of a tenant to a landlord or letting agent before the grant of a tenancy with the intention that it should be dealt with by the landlord or letting agent in accordance with Schedule 2 (treatment of holding deposit). (3)If the amount of the holding deposit exceeds one week's rent, the amount of the excess is a prohibited payment.[27]Schedule 1 Para. 6 “Payment on variation, assignment or novation of a tenancy” 6(1)A payment is a permitted payment if it is a payment— (a)to a landlord in consideration of the variation, assignment or novation of a tenancy at the tenant's request, or (b)to a letting agent in consideration of arranging the variation, assignment or novation of a tenancy at the tenant's request. (2)But if the amount of the payment exceeds the greater of— (a)£50, or (b)the reasonable costs of the person to whom the payment is to be made in respect of the variation, assignment or novation of the tenancy, the amount of the excess is a prohibited payment. 28.Schedule 1 Para.7 “Payment on termination of a tenancy” (1)A payment is a permitted payment if it is a payment to a landlord in consideration of the termination of a tenancy at the tenant's request— a)in the case of a fixed term tenancy, before the end of the term, or (b)in the case of a periodic tenancy, without the tenant giving the period of notice required under the tenancy agreement or by virtue of any rule of law. (2 )But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment. (3)A payment is a permitted payment if it is a payment to a letting agent in consideration of arranging the termination of a tenancy at the tenant's request— (a)in the case of a fixed term tenancy, before the end of the term, or (b)in the case of a periodic 7 tenancy, without the tenant giving the period of notice required under the tenancy agreement or by virtue of any rule of law. (4)But if the amount of the payment exceeds the reasonable costs of the letting agent in respect of the termination of the tenancy, the amount of the excess is a prohibited payment.(5)In this paragraph “fixed term tenancy” means any tenancy other than a periodic tenancy. Decision 29.Having considered the representations from both parties; from the definitions in the Act set out above, the Tribunal finds that of the two issues raised by the applicant, the second whilst claiming to be in respect of a holding deposit, actually concerns a tenancy deposit. The Tribunal lacks the jurisdiction under S.15 of the Act to address this. 30.The Tribunal finds on the evidence that the tenant was not compelled to pay any fee. Rather, the tenant agreed to pay a fee in return for the landlord and their agent dealing with the tenant’s request, a request entertained entirely at the landlord’s discretion.[31]Further, the Tribunal finds that the agent readily and openly set out the costs of dealing with the tenant’s request. There was no compulsion on the landlord or agent to treat with the tenants request whatsoever. 32.The Tribunal does not find that the agency expressed any attitude as being anything but reasonable towards the tenant’s request. The tenant’s assertion that £1392.00 was ‘extortionate’, was entirely unfounded. 33.The Tribunal finds that the payments made to the agent in dealing with the tenant’s application to surrender the tenancy do not exceed the reasonable costs of the letting agent in respect of the termination of the tenancy as shown. None of these payments are Prohibited and therefore none of them are due for repayment by the Landlords Agent under S.15 (3) (5) Tenants Fees Act 2019 (The Act), are Prohibited Payments. 34.Tenants are reminded that the discretion to treat with them in any request they make to the landlord or the landlord’s agent, seeking a variation to or termination of their tenancy, rests entirely with the landlord or agent. With this in mind some landlords and agents may tend to decline to entertain such requests, rather than risk a finding against them to repay any charges later found to be prohibited. The additional further risk to a landlord and/or agent of incurring a substantial financial penalty (which did not arise here), is likely to re-inforce this approach. This may lead to landlords seeking to hold tenants strictly to the terms of their contract. Neil Martindale 3 June 2025 8 Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013). If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e., give the date, the property, and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).