Do Tenants Have to Pay Renewal Fees

Do Tenants Have to Pay Renewal Fees? – Here’s What To Know

The concept of a renewal fee has been argued for years as unfair and possibly unlawful. Tenants that are renting home, or leasing any property, should not be susceptible to these additional fees that constantly creep up on them year after year. These fees are a prime example of not acting within the Tenant Fees Act of 2019. Below we talk about the actuality of tenants needing to pay for renewal fees and some interesting ways to help you dodge these fees with ease.

What is a Tenancy Renewal Fee?

In its simplest form tenancy renewal fees are charges from a letting agency to tenants for extending their tenancy agreement. For example, if you get a letting agreement for a property for six months, once this six-month period is over and you enjoy living there and want to extend your contract letting agencies can charge you to do so. The renewal fee charge is said to cover the costs of creating a new fixed agreement and can be charged to both the landlord and the tenant by the letting agency.

Why are Tenancy Renewal Fees Problematic?

The main issue surrounding tenancy renewal fees is the lack of fee structure across the board. This means that one agency can charge a larger fee than another, or the charge could change with every renewal. Whilst it is a free market and tenants are able to shop around for the best agency if they so wish, at present the housing market is very expensive and these additional charges can be crippling for renters. This is especially true for those renting in urban areas and cities.

The reason agencies get away with these charges is due to most of the smaller sized landlords not being aware or experienced within the renting market. They would prefer a letting agency to handle their affairs rather than take on the responsibility themselves. Also many landlords are under the impression that these letting agencies have their best interests at heart, when in actuality they could be negatively impacting the likelihood of renting their properties with this big additional charge.

Aren’t Renewal Fees Banned?

Since the 1st June 2019 legislation has passed to ban renewal fees for new tenancies. This is a direct result of the Tenant Fees Act 2019, which is used to assured short hold tenancies and the fees that are charges to tenants and their guarantors. It includes both letting agencies and landlords to ensure that a wider spectrum of potential foul play is covered.

The legislation includes; referencing a tenant, viewing a property fees, the cost of providing a property inventory, check out fees at the end of a tenancy and third party fees i.e. charging the tenant to pay for the services of somebody else in connection with the tenancy. If you are facing such requests for fees of this sort then you should be contacting your property ombudsman to ensure the issue has been raised and dealt with on record.

How to Reduce Tenancy Renewal Fees

As the above suggests, using a third party letting agency is not always the correct way to go about renewing your tenancy agreement. Even with these bans and legislations the renewal fee’s total can still be clawed back through various other administration fees set out by a letting agency. The same can be seen from independent landlords in the form of higher deposits, guarantor information and security or thorough background checks that can take more time and request a lot more effort from the tenant. Below are some ways you can reduce tenancy fees in general, especially renewal fees.

Communicate Directly with Your Landlord

This is by far the best and most-easiest way to reduce tenancy fees across the board, especially the possibility of renewal fees. Tenants should not be hassled for wanting to stay in a property; if you were dealing with a landlord directly they would understand the value of a loyal tenant. When conversing through a third party these concepts go straight out of the window. If you are able to speak directly to a landlord this could reduce all fees, however maintenance and general issues could be harder to resolve. To remove the element of surprise a contract should be drawn up to allow cover in case of such emergencies.

Read Your Contract

In the absence of being able to contact your landlord directly you should check your tenancy contract to ensure any fees are documented within them. Many letting agencies want to upsell properties, especially in urban city areas. This means that if you lock in an amount for a 12-month contract after that time the property could have increased in value. This means that your home could be worth more so it would be more advantageous to list the property and get new occupants rather than renew your contract.

This has led to the rise in housing rental prices globally. You should check within your contract and see if there is any clause stating that you are subject to a renewal fee, or any additional fees and if not then you must contest against it.

Offer to Pay Monthly

Periodic tenancy is a pay monthly agreement between you and the landlord or letting agency that allows the tenant to not to be subject to renewal fees. Whilst this is a bit riskier than fixed contracts, it allows the tenant to reduce outgoings and overhead fees. It also allows the tenant to leave at months notice if the agency or landlord tries to increase rent, fee’s or changes the terms of the initial agreement.


Legally tenants do not have to pay renewal fees, however some letting agencies will add this to their contracts regardless. When looking for a new home it is important to be vigilant of these additional charges and possible fees. They will usually be written into a contract, however in some instances agencies and landlords just try their luck. Be prepared and knowledgeable about your rights before handing over any money or securing a property renewal contract.