Our renewal commission has gone: how do we replace it?

Greymill AcademyUK6 min readReviewed Oct 202655 primary sourcesUS version

The short answer

Since 1 May 2026 English tenancies have no fixed term to renew, so renewal-based fees may stop and the gap has to be priced openly to landlords.

The takeaway. Read each agreement's trigger wording, price every service separately with VAT shown, and give landlords written notice of new terms rather than relying on a variation clause.

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Written for portfolio landlords, letting and managing agents, HMO operators and short-let operators in England, Wales, Scotland and Northern Ireland.

The short version

  1. Read the commission trigger in every agreement.Commission due "on renewal or extension" may simply stop. "Remains in occupation" may still bite. Forecast and bill only what still applies.
  2. Price every service separately, with VAT shown.Tenant find, management, section 13 rent reviews, compliance, check-outs. Nothing hidden in the small print, and in England no agency costs passed to tenants.
  3. Write to every landlord with the new terms.Have your solicitor check the terms and notice first. Then give written notice and the right to leave; don't rely on a variation clause.

If part of your agency's income came from commission charged when a tenancy was renewed or extended, that income is now at risk. In England there have been no fixed terms since 1 May 2026, so there are no renewal events left to bill. The answer is not a quiet new charge somewhere in the terms. It is a fee schedule that prices each service in the open.

Start with the wording you already have

Commission written as payable "on renewal or extension" may simply stop. A term charging commission for as long as the tenant "remains in occupation" may still bite. Read the trigger wording in each management agreement before you forecast next year's income, and stop billing wherever the trigger has gone.

The rule

You cannot pass the cost to tenants (England)

In England, only the payments the Tenant Fees Act 2019 lists can be taken from tenants. Agency costs cannot be shifted to them through referencing, administration, inventory, check-out or renewal fees, so recover those costs through transparent pricing to landlords. Wales and Scotland have their own bans. As of Oct 2026.

Tenant Fees Act 2019; Renting Homes (Fees etc.) (Wales) Act 2019; Rent (Scotland) Act 1984 s82

The rule

Buried fees can be unfair terms

Where the landlord is a consumer (an individual not acting for a business, which covers many single-property landlords and fewer portfolio landlords), fee terms must be fair and transparent, and prominent if the price is to escape a fairness review. In OFT v Foxtons the court held renewal commission terms in standard landlord agreements that were not brought to the landlord's attention open to challenge as unfair, and the CMA's guidance for lettings professionals sets the same expectation. As of Oct 2026.

Consumer Rights Act 2015 ss62, 64 and 68; OFT v Foxtons Ltd [2009] EWHC 1681 (Ch)

Redesign the fee schedule

  1. Tenant find.A one-off fee for finding the tenant.
  2. Management.A percentage of rent collected, or a fixed monthly fee per unit.
  3. Fixed fees for work that used to hide in renewals.A section 13 rent review with evidence, annual compliance management, inventory and check-out, and possession case management.
  4. VAT on every line.Show VAT against each fee. As of Oct 2026, an agency over the £90,000 VAT registration threshold charges VAT at 20% on its fees; your accountant confirms your own position.
  5. Tell existing landlords.Give them written notice of the new terms and the right to leave, rather than relying on a variation clause. Have your solicitor review the new terms and the notice first.
  6. Publish the new list.Show the full fees list with VAT in each office, on your website and on portal listings, with your redress and client money protection statements. As of Oct 2026, leaving it out risks a fine of up to £5,000 (Consumer Rights Act 2015 ss83 to 88).
Replacing £140,000 of renewal commission at a 200-unit agency (indicative)
Management rate up 1.5 points to 9.83%, on a £3,120,000 rent roll£46,800
Section 13 rent review at £150, on 160 units£24,000
Annual compliance fee of £120, on all 200 units£24,000
New fee income from this mix£94,800
Still to cut from costs or win in new units£45,200

£140,000 - £94,800200 managed units at an average rent of £1,300 pcm. Lettings income was £400,000, of which £140,000 (35%) was renewal commission; management alone is £260,000, 8.33% of rent. Replacing all £140,000 would take £700 per unit a year (£58.33 a month, ex VAT), or a management rate of 12.82% if it all went on the percentage.

The rule

The section 13 review you are pricing (England)

A rent review clause has no effect. The rent moves only by a section 13 notice on Form 4A, at most once a year (52 weeks since the start or the last rise), with at least 2 months' notice. Serve it with dated comparables and proof of service, and diarise any tribunal date. Elsewhere rent can rise once in 12 months: in Wales with at least 2 months' notice, in Scotland on the prescribed notice giving 3 months, and in Northern Ireland with written notice. As of Oct 2026.

Housing Act 1988 s13

AvoidKeeping the renewal commission line in next year's forecast, or adding a renewal-style charge deep in the terms of business.
Do this insteadStopping billing where the trigger has gone, pricing each service separately with VAT shown, and writing to every landlord with the new terms and the right to leave.

Income whose trigger has gone simply stops, and a buried charge to a consumer landlord is open to challenge as unfair.

Giving landlords the right to leave puts units at risk, and every unit takes recurring income with it. At the example's 8.33% of £1,300 pcm, a unit is worth £1,300 a year, so losing 10 units costs £13,000 a year. Track fee income per unit and landlord churn from the day the new terms go out.

Asked in Greymill

Example question and answer from Cash & Profit
You
We manage 200 flats in England. Average rent £1,300 a month. Last year: £260k management fees, £140k renewal commission. I'm keeping the renewals in next year's forecast and adding a small continuation fee for landlords in the small print. Sensible?
Cash & Profit
No to both. If your agreements charge commission "on renewal or extension", that £140,000 has nothing left to trigger it.

Check each agreement's wording: "remains in occupation" may still bite. Forecast only what still applies.

Price the gap in the open. One mix on your £3,120,000 rent roll:
Management, 8.33% up to 9.83%: £46,800
Section 13 rent reviews, £150 on, say, 160 units: £24,000
Compliance fee, £120 on all 200 units: £24,000
New income: £94,800, leaving £45,200 to cut or win

Drop the small-print fee. A buried charge to a consumer landlord (an individual not acting for a business) is open to challenge as unfair.

Show VAT on every line. Once your solicitor has checked the terms, send them to each landlord with the right to leave.

The catch: each unit that leaves costs about £1,300 a year, so track churn from the day the terms go out.

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Your question

I run a property management business in the UK. We manage [number] units, [number] of them in England, at an average rent of [£ pcm]. Last year our lettings income was [£], of which [£] was renewal or extension commission and [£] was management fees at [%]. Our management agreements say commission is payable [paste the trigger wording]. Show me how much of the renewal income stops, then model two or three fee mixes (management rate, section 13 reviews, compliance fee, check-outs) that replace it, with VAT shown, and what is left to cut or win.

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Sources

The primary sources behind this lesson, checked Oct 2026.

  1. RRA 2025 Part 1 Ch 1 (assured tenancies periodic) (Agency fees after periodic tenancies)
  2. ss62, 64, 68 (Agency fees after periodic tenancies)
  3. judgment, conclusions (Agency fees after periodic tenancies)
  4. guidance (Agency fees after periodic tenancies)
  5. standard rate (Agency fees after periodic tenancies)
  6. reg 39 (Hard cases: possession, arrears, hmos)
  7. regs 3(1)(d), 11 (Hard cases: possession, arrears, hmos)
  8. exemptions (Hard cases: possession, arrears, hmos)
  9. reporting (Hard cases: possession, arrears, hmos)
  10. Housing Act 2004 section 249A(4); Housing and Planning Act 2016 section 44; SI 2026/421 regulation 11 (Hard cases: possession, arrears, hmos)
  11. Building Safety Act 2022 section 119(2) and Schedule 8 paragraph 2 (Hard cases: possession, arrears, hmos)
  12. arts 3, 8 (Agency regulation, client money and AML)
  13. regs 3, 4, 6 (Agency regulation, client money and AML)
  14. ss83 to 88 (Agency regulation, client money and AML)
  15. roadmap 19 Jun 2026 (Agency regulation, client money and AML)
  16. HA 1988 ss16I to 16K; RRA s57; HA 2004 s95 (Agency regulation, client money and AML)
  17. reg 13(4)(b)(ii) MLR 2017 as amended (Agency regulation, client money and AML)
  18. ITTOIA ss272A, 274A to 274C (Tax for landlords)
  19. Sch 1 para 40 (Tax for landlords)
  20. s7 (Tax for landlords)
  21. Residential-property rate and annual exempt amount; HMRC CG10245 on allowable base cost and disposal costs (Tax for landlords)
  22. s53 (Tax for landlords)
  23. s116(7); FA 2024 (Tax for landlords)
  24. s4B (Contract red flags)
  25. ss1, 2 (Contract red flags)
  26. Sch 1 para 2 (Contract red flags)
  27. s1(1)(a); Sch 1 para 2 (Contract red flags)
  28. HA 2004 s213; SSI 2011/176 reg 3; RH(W)A s31; 2006 NI Order art 5A (The calendar: deposits, safety checks, rent increases)
  29. regulation 36(3) and (9); SI 2020/312 regulation 3; Housing Act 2004 section 68 (The calendar: deposits, safety checks, rent increases)
  30. Energy Performance of Buildings (England and Wales) Regulations 2012 regulations 6 and 11 (The calendar: deposits, safety checks, rent increases)
  31. s13 (The calendar: deposits, safety checks, rent increases)
  32. deadlines (The calendar: deposits, safety checks, rent increases)
  33. deadlines (The calendar: deposits, safety checks, rent increases)
  34. HA 1988 s16D as inserted by RRA 2025 (Who must sign off, deliverables and client data)
  35. RH(W)A 2016 s31 (Who must sign off, deliverables and client data)
  36. code of practice 1 Oct 2026 (Who must sign off, deliverables and client data)
  37. forms list (Who must sign off, deliverables and client data)
  38. ss7, 8 (Wales: occupation contracts and rent smart wales)
  39. RRA 2025 ss44 (Part 2A, s8A), 45(2), 46; each "in force at 1.6.2026 by W.S.I. 2026/6, art. 2(b), (c), (d)" (Wales: occupation contracts and rent smart wales)
  40. ss31, 87 (Wales: occupation contracts and rent smart wales)
  41. ss173 to 175; Sch 9A (Wales: occupation contracts and rent smart wales)
  42. s217 (Wales: occupation contracts and rent smart wales)
  43. ss157, 181 (Wales: occupation contracts and rent smart wales)
  44. ss1, 48, 71 (Scotland: private residential tenancies)
  45. s54; Sch 3 (Scotland: private residential tenancies)
  46. Coronavirus (Recovery and Reform) (Scotland) Act 2022, Part on eviction grounds (Scotland: private residential tenancies)
  47. ss22, 24 (Scotland: private residential tenancies)
  48. Act title; Part 1 rent control areas (Scotland: private residential tenancies)
  49. ss82, 84, 92B (Scotland: private residential tenancies)
  50. whole Act (Northern ireland: private tenancies)
  51. s11 (inserting art 14 of the 2006 Order) (Northern ireland: private tenancies)
  52. Housing Rights summary of the Department for Communities plan (Northern ireland: private tenancies)
  53. s1 (Northern ireland: private tenancies)
  54. s5; 2006 Order art 5A (Northern ireland: private tenancies)
  55. s7 (Northern ireland: private tenancies)

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