Letting agent renewal fees should be scrapped in instances when tenants decide to stay on in a property, the National Landlords Association (NLA) claimed this week.

Its comments come hot on the heels of a court order, secured by the Office of Fair Trading (OFT) against a High Street letting agent found guilty last summer of severely camouflaging its commission charges.

Renting out a house or flat can seem like an easy way to make money, but private landlords are often subject to a range of fees and charges that can eat into their profits - especially if they use a lettings agent.

And few fees rankle more with landlords than renewal charges imposed when their tenants decide to continue living in a property originally let by an agent.

While most buy-to-let landlords recognise that a fee is justified when an agent finds them a new tenant, they are less happy about paying the same agent a second time should their tenant be happy enough in the property to renew their contract.

This is especially true when the fees can be up to 100% of the original commission charged, amounting to a fee of several hundred pounds for drawing up a new Tenancy Agreement.

NLA chairman David Salusbury said: "Where the letting agent performs no service to the landlord throughout a tenancy, why should they still be able to charge the landlord of their tenant chooses to renew the tenancy?"

Letting agent renewal fees hit the headlines last summer when the High Court ruled that one High Street agent's commission charges were "severely camouflaged" and represented "a 'trap' or 'timebomb' for consumers".

The OFT, which has made it clear that landlords "should not be presented with a surprise bill for services they have not consciously agreed to", has been pursuing a court order to protect landlords using the services of an agent ever since.

It is this court order that was granted this week, prompting the NLA's comments.

Salusbury added: "The message to all letting agents is now clear: do not try and mislead your clients.

"Meanwhile, our advice to landlords remains the same. Always check the small print before signing on the dotted line."

Lettings agents, who are obviously keen to keep renewal charges as they are, argue that if these fees were removed the initial charge made to landlords would have to increase.

However, if you are a landlord unhappy about the idea of paying renewal charges in circumstances where the same tenant is staying on in your property, the good news is that you can take steps to avoid them.

The renewal fee tends to be buried in a single paragraph in the body of your contract with a lettings agent.

So check the percentage rate and address it before you instruct the agent, as if you wait until the tenant is due to move in, the agent is likely to take a harder line, and if you wait until it is time for renewal you will be trapped by the agreement signed at the outset.

That said, you are unlikely to have the renewal fee waived entirely if the regulatory regime remains as it is now.

So aim to cut it down to at least 50% of the original commission charged.

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