Re-letting/New Contract fees for existing tenant

$200 is ridiculous.  It sounds like you've been charged a re-letting fee as well as a re-advertising fee.  That said, a re-letting fee can be negotiated to zero when originally recruiting your Property Manager.

It is true that when a 12month contract expires, the tenant can stay on a "periodical lease" which means they can stay on a month-to-month sort of basis.  The difference is that they have to give you less notice if they want to leave.  It is important that 120days before the lease expires you find out if the tenant wants to re-sign, and if not, you must give them notice that they must vacate at the expiry of the lease.  Otherwise yes, it can lapse into a periodical lease if the agent doesn't bother to get them to sign a new lease.

no a re-letting fee should not be that much.  it should be around the $55 mark.  they are charging you an amount as though they had to re-advertise, hold open for inspections, ref check tenants, and sign them up.  a re-let is simply printing a piece of paper and having the tenant sign it.  not worthy of a $200 fee.  have you referred back to the contract you signed with the agency re this?

either way, if you did indeed sign up for such ridiculous fees, you can still now say "well do you know what?  i am literally going to fire you and hire a different agency right now unless we ammend this fee structure."  be sure you have first dug around and found an agent you would be happy with before you do this.

i wouldn't try to self manage if i were you.  it's great so long as everything is perfect with the tenant, but if something goes wrong, it becomes a huge mess if you are self managing.  if nothing else, your local property manager is handy key storage for when the tenant locks themself out of the house and needs to borrow the spare set, and sort of cheap legal advice.  they are at vcat all the time seeing what the likely outcomes of vcat cases will be and can thus advise you accordingly.  they also have access to TICA, the bad tenant database, to screen prospective tenants.

Pre-Negotiation is key here. It should always be done at the start (hiring the manager) but can be done at this stage in. I even go as far as pre negotiating that if the manager cannot get me a 12 month lease then I will not pay any subsequent let fees for a 12 month period. (that is only 1 let fee can be charged every 12 months). I then Ensure that a new let fee can only be charged upon one tenant vacating and another occupying the property no matter when that is.

I would be going to them now and saying that you are a valued client, you can easily take your business elsewhere, that you have been offered to not be charge a let/start up fee from their competitors etc. And for the inconvenience i would be asking for some reduction in management fees (may be hard if you have only 1 property with them). It might also be worth calling a competitor and asking what they will offer you to take the management over. ie rates etc.

Oh and on a final note….Do NOT self manage! A good agent is worth their weight in gold, its just a matter of finding one.

Happy investing

The re-letting fee should be no more than $15; any more and they are ripping you off. They have completed no additional work for wich you are already paying them 8-10% management fee of which re-letting is a normal part of their duties.
You should also see your origional contract for said fee.
Give them a choice, refund the fee or find a new client ie: sack them ASAP.

Yeah this happened to me as well, I had a property years ago and I never got charged a "re-let" fee by my agent Ray White.  However, with my second property, the management was by an on-site manager and when he first charged me a re-let fee of 1/2 week rent I was surprised and I questioned him about it.

When I went back to my written agreement, sure enough this fee was listed, so I either did not read the agreement properly at the time or did not understand the full implications of this fee.

When you think about it, if your tenant keeps renewing 6 month leases, you are losing a full week's rent every year due to this fee.

In future, I will definately be checking my agreements with property managers and making sure I don't have to pay this fee (or at least pay alot less for it).

Darren.

Check the agreement for a clause about your agent not carrying out their job correctly. Firstly – You have not agreed to a new 12 month lease, therefore, they should not hold you to 5% if you terminate the agreement, also, contact Consumer Affairs (or your state equivilant if you're not in VIC) as there are strict regulations on what agents can and can not put in a managing agreement. According to what you have told us the agent has been negligent in their duties and so you should be able to exit the agreement free of penalty.

Also, if your tenants were in a fixed term agreement when they left that is a break lease, that tenant should have paid rent until a new tenant was found, advertising fees and a pro-rata letting fee. From the information you have provided your property manager is not worth the space they occupy and give the rest of us a bad name!

Just for the record, $200 is excessive !!

Don't self manage, find yourself another local agent who will do their job properly, you'll find the better service is probably cheaper than what you are currently paying!!

Yes, negotiating the contract details before signing is so important. 

We don't pay re-letting fees at all if the same tenant stays on. They have competition from other agencies so they always agree to this. Also cross out any notice period and reduce it to 30 days or less.

Nurse 1 definitely look for another manager provided you are able to get out of this contract. If they are slack then they don't deserve your money.