92 Kingscourt Road, London, SW16 1JB. LON/00AY/HTC/2026/0013
DECISION
[1]9 In this case I need to consider the provisions of Schedule 1 paragraph 7 as set out above. It would seem that the requirement to make a payment in respect of the early termination falls within paragraph 7 (3). However, if those costs exceed the reasonable costs of the letting agent, they become a prohibited payment in so far as the excess is concerned. The Act overrides the terms of any agreement between the parties.[2]10 I find merit in the Applicants argument that the recovery of the Landlords letting fee, said to be £4,507.67 is excessive, in effect double recovery. The agents have not produced a copy of the letting agreement with the Landlord and indeed have not participated in these proceedings. I find it improbable that the Landlord would be willing to pay his agent for the lost commission in the period after surrender to the intended contractual surrender date, when the Property was relet, it would seem after a month, and the agent would therefore recover the letting fee for the new agreement.[3]11 I therefore find that part of the landlord letting fee as it has been called is a prohibited payment where it exceeds the reasonable costs of the letting agent. It is not a loss to the Landlord and has not been shown to be one. There is no evidence that the agent has sought to recover the alleged loss of the letting fee from the Landlord.[4]12 The question I need to consider is how much is the loss? The evidence before me indicates that the surrender was effective from 7 December 2025 but that the letting did not start until January 2026, a loss of a month’s rental perhaps.[5]13 The administration charges for checkout and administration would seem reasonable at £58.44 and £40.55. In addition, a void between the ending of the Applicants agreement and the start of the new one, in so far as this information has been given to me would be it seems be one month. At a monthly rental of £3,900 to which a fee of 11% is payable this would give a figure of £429 + VAT of £85.80.[6]14 The Applicants offered £1,200 in an open email dated 27 October 2025. This seems eminently reasonable. It reflects the figures I have set out above and also represents reasonable costs for the administration charges for dealing with the new tenants, the letting agreement and review of references.[7]15 Accordingly pursuant to section 15 of the Act I having found there has been a breach of Schedule 1 paragraph 7(4) I find that a sum of £1,200 can be retained by the Respondent but that the sum of £3,400 must be reimbursed to the Applicants in 14 days. The Applicants must, upon receipt of this decision provide the Respondent with the bank details of the person(s) to whom the payment can be made. The 14-day period will run from the date this information is given to the Respondents.[9]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 a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. 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).