Letting Agents Fees (to Landlords)

Steve_xx

If you let your flat/property there are a number of fees associated with doing so, if you use an agency to let it for you.

The charges quoted are as follows for a basic package, ie they wont be managing it:

1. Administration charge for preparation of tenancy agreement - £100
2. Energy Performance Certificate - £79
3. 10% + VAT of the rental charge for the period of the agreement.

thereafter at every renewal of the contract for the same occupant there would be a charge of £30.

Are these charges the norm for Manchester?

tbs624

1. You can buy a decent Tenancy agreement from the Residential LL association for a fiver - adding some names and the rent info to it doesn't equate to 95 quids worth of work ( & they'll probably also try to charge the tenant for the same agreement)

2. You can get an EPC done for around fifty quid in Manchester.

3. 10% +vat is what a lot of LEAs will try to charge

Refuse to pay for renewals - it's money for old rope, and the tenant can stay on under a periodic agreement with no further contract needed.

If you must use an LA make sure they are ARLA/NALs/OEA registered and that they will register your tenant's deposit. Don't sign up with them until you've thoroughly checked the small print (things like repairs - using the LAs repairs blokes will costs you more than having your own available)

Steve_xx

Thanks for your response. The proposal thus far is that the agent would find a tenant and after the first month rental has been paid they would have no further involvement until renewal time when they propose a £30 charge to renew, plus the 10% + VAt of the rental.

I note what you say about not paying for renewals. Just to confirm, are you saying that if the tenant stays on after 12 months that there should be no renewal fee and no ongoing 10%+ VAT payment to LA?

Is it normally the case that one would go for a 12 month agreement, or is it better to go for 6 months and then let it roll on as per your earlier post? Obviously a fee of 10%+VAT of 6 months rent is better for the landlord than 10% of 12 months rental.

Is it normal to negotiate the 10% fee down or is it standard throughout the industry/country?

sooz

Steve_xx wrote: »

Is it normal to negotiate the 10% fee down or is it standard throughout the industry/country?

Negotiate hard. 10% (+vat) let only is on the high side for London fees.
Talk to other agents, & then go back to each one to say what the other has offered you.

And athough you shouldn't need to pay the same rate again at renewal, many still like to claw money off you this way. If it's with the same tenants, & the contract goes periodic, there is NO work for the agent to do. A lot of agencies start negotiations with 10% first year & 6% second.

Steve_xx

Thanks for that. We're talking about Manchester fees here. I kinda thought it was high and might be negotiable, ie is 5% + VAT attainable, do you think?

franklee

Steve_xx wrote: »

Is it normally the case that one would go for a 12 month agreement, or is it better to go for 6 months and then let it roll on as per your earlier post? Obviously a fee of 10%+VAT of 6 months rent is better for the landlord than 10% of 12 months rental.

I'd bet they aim to charge you that percentage for all months the tenant is there regardless of if the tenancy goes periodic so make sure you check out their terms for that case.

As you plan to manage the property yourself why not go for an agent that has a fixed fee for tenant find? If they aren't doing anything for you month-on-month like collecting rent or managing repairs etc. then why go for a fee structure based on the number of months occupied?

In other words do a lot more shopping round.

Also consider how the agent will look to the tenant. What charges do they make to the tenant? This is important as you want to attract good tenants.

tbs624

You can check out other people's views of some agents( and/or add your own) here

sooz

tbs624 wrote: »

You can check out other people's views of some agents( and/or add your own) here

thanks for this. I had to use an agent for the first time in 10 years (baby coincided with new tenancy) & I'm really regretting it now. Once I've gone through the ombusdman, complained to the NAEA & ARLA, then i'll start naming & shaming. As I've finally managed to rectify all their mistakes, I'm looking forward to this bit

Steve_xx

Thanks for all your advice, it's much welcome.

One more thing if I may ask. I'm thinking that it's normal to take the rent from the tenant on the same date each month, thereby meaning that there would be 12 payments for a whole year. Then I thought to myself that it would be more profitable if I rented it in 4 weekly cycles as this would give 13 payments per year? I know that local authorities rent on a weekly or fortnightly basis and so the problem of underpayment wouldn't arise.

I guess you could simply decide what the overall rent would be for the year and then divide it into 12 portions and that would solve it. I just wondered what was the norm, ie 4 weekly rentals or monthly rental?

anotherpaul_2

I suspect monthly is normal for private lets - and having it on the same date each month avoids confusion about which day the next rent payment is due. Note that the notice period is based on the rental payment period too.

Steve_xx

Cheers, thanks for your reply.

I take it that the landlord would normally continue to pay the service charge?

Also, it occurred to me. What if the tenant leaves early, would you be able to recover any of the agency fee?