Letting Agent adding a new charge

mm4673

Hi all,

Looking for advice with the following problem.

We found a flat we liked and duly made an offer. For this we were faxed a Tenancy application, this stated:

- To make an offer they would charge one weeks rent and an admin charge
- Once the offer was accepted another week's rent would be debited as a deposit
- On one page there was list of possible charges - only the admin fee of £140 had a cross by it

So we signed it and both the initial charge and the deposit for the offer being accepted have been charged. So we assumed everything was ok.

Now we've received the Tenancy agreement and the sum outstanding (6weeks deposit + 1 months’ rent in advance - the 2 weeks rent already paid) includes a £180 management fee which was not marked on the original application.

The Letting agents are claiming this was a mistake and that it was always a managed property so they need to apply the charge. On the other hand I asked if there were any other fees when making the application and was told no (only verbally unfortunately) and I have an electronic copy of the original mail which clearly doesn't have the management fee marked on it.

To me this is changing the agreement we agreed to initially and I intend to stand my ground on this although it may lose us the flat, which we need to move into on Friday.

We would be very grateful for advice on how to proceed or any rights we have in this.

huntersc

You have the right to pull out, they cannot hold you to a contract that they have changed.

However it sounds like it was a mistake so they're unlikely to drop the charge altogether.

If it were me I would say that I want the property but have budgeted a specific amount and cannot afford more. Would they be willing to reduce the deposit required by the management fee amount. That's a decent enough compromise.

Ultimately they would need to give back any deposit you have paid if you do pull out, they changed the contract so you're in the driving seat. However if you want to rent the property you'll need to find a compromise.

Don't forget, they would spend at least another £200 remarketing the property etc and finding a new tenant if you did pull out, plus it would take them at least another few weeks to get someone in so you're in a strong position.

So I would get them to absorb the £180 fee in another way. If that doesn't work ask them what compromise they are willing to make. You cannot afford the extra £180, they cannot drop it, how do we reach an agreement.

poppysarah

Are they allowed to charge offer fees? Sounds like an appalling way to be treating tenants.
You can try the CAB or shelter for advice

mm4673

The initial week's rent they take when we make an offer is offset against the first month's rent unless we pull out, in which case we lose it. This is the first time we're renting so I don't know if this is normal practice.

Also thinking about it, does anyone know if charging the tenants a management fee is normal? I'd have thought the landlord would pay for that privilege...?

Thanks for the advice regarding a compromise. The only thing is, even if we offset the fee against the deposit it is still money we lose at the end of the day (we would not get it back when we get the deposit back at the end of our tenancy). The main objectives for me are to not get ripped for a fee which was not initially stated and secondly to hold them to a contract they have put their signature to.

I'm just angry that they are trying to change a contract we'd both agreed . If the roles were reversed and we wanted to pull out of the contract there's no way they'd agree. Surely we must be able to hold them to their contract?

tbs624

Are you in Eng/Wales or Scotland?

You could contact your local Council's Private Sector Rentals Team and the Trading Standards Office.

Management costs should be down to a LL, not to you as a tenant - the LA acts for the LL and they can't impose fees on you that were not clearly outlined from the outset. The costs are a "material fact" when any tenant makes a decision and should always be be detailed in full.

You could also check whether they are members of ARLA, NALS, OEA schemes and raise a complaint there.

A LA who behaves likes this from the start is probably not going to be straightforward to deal with during any future tenancy - I'd look elsewhere , preferably for a property let by a reputable self-managing LL( you could try the local LL association)

huntersc

mm4673 wrote: »

The initial week's rent they take when we make an offer is offset against the first month's rent unless we pull out, in which case we lose it. This is the first time we're renting so I don't know if this is normal practice.

Also thinking about it, does anyone know if charging the tenants a management fee is normal? I'd have thought the landlord would pay for that privilege...?

Thanks for the advice regarding a compromise. The only thing is, even if we offset the fee against the deposit it is still money we lose at the end of the day (we would not get it back when we get the deposit back at the end of our tenancy). The main objectives for me are to not get ripped for a fee which was not initially stated and secondly to hold them to a contract they have put their signature to.

I'm just angry that they are trying to change a contract we'd both agreed . If the roles were reversed and we wanted to pull out of the contract there's no way they'd agree. Surely we must be able to hold them to their contract?

The initial deposit you made was probably what's called a holding deposit, you're right, they can take this off you but only to cover costs that they have incurred. I imagine they could probably claim they have incurred exactly that amount in costs, so yes, I guess you've probably lost that.

Charging tenants a management fee, not something I've come across before but I have to admit I haven't rented that many places so it could be valid but it sounds like something the landlord should be paying.

You both signed a contract, you have a moving in date, you have incurred costs I imagine. They then change the contract and add a fee. Yes, you should be able to hold them to it. However they're estate agents, they will fight it and my bet is that it would cost you more to fight it that to pay it.

I'd argue it with them, of course you have rights, you are also in a very strong position legally but at the end of the day, you want the property and they want to let it. The easiest thing to do, especially as you need to keep a relationship friendly over the course of the agreement, is to find a compromise with them. Get them to reduce the rent by £10 a month, something like that.

If you really want to play hardball, tell them that unless they waive the fee you're pulling out. Either they will waive it or they'll call your bluff. My guess is that they won't want to go to the effort of finding another tenant and would prefer to work things out with you.

Do you want to say what EA it is? Is it a nation recognised chain or a small local operation?

Hang on, re. your first point about the holding deposit, when you put that down you will probably have signed something, this will have had the costs on it. If it didn't include the mgmt fee then you are entitled to get your holding deposit back as well. You signed and handed over the deposit based on the costs going forward, they cannot change those and then keep the deposit. Otherwise they could increase the rent by £500 a month and you'd have to go through with it. So I think you could easily get back that holding deposit.