Letting fees and ways to avoid them

bwanamakubwa

I have found a lovely place to move into, and was shown the property by the owner. We were put in touch through a letting agent however, and they are asking for an "administration fee" of over £200.

They have not given me a breakdown as requested as I feel they know they have only put two people in touch. All contracts will be drawn up by the owner, and we were the first people to see the property.

My question is, can I go directly through the owner now as I dont want to work with the agent who are rude and simply not willing to negotiate or explain this fee. Is there a legal issue with me doing this?

Thanks

ladylumps45

hi, did the owner give you their number?? if they did then i would personally contact them .they can only say no.the letting agent would be cheesed off but only because they wont get their money!
not sure if theres anything legal to say you cant but im sure someone on here will know.the fees they charge are massive for their admin so its worth a go!

diabolikal

I can only guess, but unless you signed something saying otherwise with the letting agent you can approach the owner yourself.

Obviously the owner has signed something with the letting agent, so they may or may not be able to respond to you, but there's no harm in trying.

missymugwump

A fee is perfectly standard
Dont forget the letting agent has to market the property
Use their fuel & time taking/meeting people at the properties
Spend time drawing up contracts etc...

I think the fee reasonable to say the least my last one was £375 but that included referencing/credit check

Does yours include this ?

Geenie

Unfortunately bwanamakubwa, it is the LL who has employed the LA, and they will probably be aware of what fees are being charged by them. I assume the LL is getting them to do all the marketing, applications and searches so they only have the viewings and final decision to deal with.

The LL will have a contract with the LA, so you will have to pay this fee I would imagine.

Apart from this cost, check what happens when the AST is renewed at 6 months/a year, as there are many tales on here about tenants getting charged for something by LA's, that infact requires no additional cost if both parties are happy to continue the tenancy.

Some LA's only charge for this initial service and then disappear, and the LL takes over once a tenant is found. Find out who you will be dealing with after moving in, as it can make a difference to costs every year.

tbs624

missymugwump wrote: »

A fee is perfectly standard

Just because something becomes "standard practice" does not mean that it is not a rip-off

missymugwump wrote: »

Dont forget the letting agent has to market the property
Use their fuel & time taking/meeting people at the properties
Spend time drawing up contracts etc...

The LA is contracted by the LL - the LL should pay these charges, not least because the LL is able to set them against rental income for tax purposes. In this case the LA did not meet the potential T at the property - the owner/LL did. Charging whopping fees for time drawing up contracts is the biggest con in lettings - a standard AST is kep on file, names inserted and then printed off x 2.Minimal work, max profit.

missymugwump wrote: »

I think the fee reasonable to say the least my last one was £375 but that included referencing/credit check

How much ???? A comprehensive credit check can be obtained for a max of 60 quid, with the basic ones started at around 15.

Years ago LAs used to charge potential Ts a fee for registering with them - this practiced is no longer allowed but they seem to be getting increasingly greedy with their loose admin fee structures and IMO it's high time that LAs were regulated and their fees capped.

Find a Ll who self-manages their properties - try going via the local LL association. They tend only to charge the true costs of the credit check.

gismo1554

My fees for my new flat is £200 admin costs. This included checking references, drawing up contracts, producing an inventory which includes photographs for me to check and dealing with any problems that occur so that I don't need to contact the landlord directly. The renewal fee is then £50 which is to draw up the contract.

My last LA was charging £150 for the first admin fees but then £150 for each renewal as well and I never got a copy of an inventory.

I think admin fees are fairly standard and tend to be a similar amount (£150-200). I don't know why a LA wouldn't tell you what the fees covered though.

princeofpounds

The whole thing is a complete rip-off. The letting agents are employed by the landlord and perform no service for the tenant whatsoever.

However, it has become standard market practice, which is a big shame. The reason for this is the landlord believes that these extra charges come at no cost to them. If I get rented, why do I care if my tenants have to pay an extra £200? So the agents can be more competitive with the visible landlord charges.

Of course, what they fail to realise is that the cost of these charges indeed does come out of accomodation budgets. So the landlord pays for them indirectly because that money would be otherwise spent on rent. Per individual landlord, the money is not that huge, but in aggregate it's massive, which is why the status quo is maintained.

The big problem for tenants is that the lettings market is pretty illiquid, heterogeneous (i.e. each house is very different so there may only be one or two suitable) and time-pressured, which can give agents a virtual monopoly over the distribution of any individual suitable house. This mean tenants do not really have the practical option to shop around for lettings fees and so the agents are able to take more than would be economically justified.

I do believe that the incremental costs of each application i.e. credit check should be funded by tenants, but charges for these are generally totally disproportionate to their cost.

Unfortunately, I do not know how you would solve this.

charliee_3

we are currently renting, i found the property through an agents website, it was the owner who showed us round, we were the first people to see it, she seemed lovely, nice family woman, and they live just across the road. I have always done private rents so we asked them if they would consider it, they agreed. we pay £25 a month less than the advertised fee and no upfront costs except the deposit. They dont have to pay fees to the letting agent every month so its good for them too.
She told the agency that she had changed her mind and was renting it to family.. i had said to her if the agency got funny we would go through the agency to make it easier but they didnt make any fuss..

we may have been lucky and i wouldnt have done it if the landlord seemed sleazy IYKWIM.. then i'd be happy to pay for the backup of the letting agents!!

Conrad

Such a childish view that such a fee is just for drawing up a contract. What about the staff wages, insurance, cars, admin etc? What about all those properties that don't get let for which the agent doesn't get paid?

I trust people that expect everyone else to work for nothing will welcome a paycut themselves if thier boss asks?

tbs624

Conrad wrote: »

Such a childish view that such a fee is just for drawing up a contract. What about the staff wages, insurance, cars, admin etc? ..

No one has said that "such a fee is just for drawing up a contract" . Some LAs will bundle the fees together, as here, and some will stipulate £75 -100 quid fee for "drawing up a contract", when some of them probably couldn't draw up a circle without guidance. A key point seems to have bypassed you - that LAs are contracted by the LL to provide a service to *them*, and the LL can offset "professional" fees for tax purposes. There is a basic inequity here - people need a roof over their heads. If the intermediaries charge huge fees and it becomes "standard practice" to do so then the potential T is a huge disadvantage:they have little option but to pay.

Conrad wrote: »

What about all those properties that don't get let for which the agent doesn't get paid?

Work as an "agent" within many other occupational areas and you get paid *purely* on results - some properties won't get let because they are poorly presented, others won't get let because some LAs are idle, and are rude or offhand towards potential tenants.

Conrad wrote: »

I trust people that expect everyone else to work for nothing will welcome a paycut themselves if thier boss asks?

Many people's experience of LAs is unfortunately that the word "work" or "professional service" is an alien concept to some of them.

As your sig indicates that you work as a mortgage adviser you will be aware that anyone - that's *a-n-y-o-n-e* - can set themselves up as an LA: unqualified, unregulated, inexperienced and lacking in knowledge of the basics tenets of LL&T law, devoid of customer service skills...............dealing with people's homes and thousands of £ worth of rent and deposits.