Rent Admin Fee

clb776

letting agency fees are so expensive!! i am looking for a new home, and am finding the fees of each agency are making me decide if i wanna bother looking at their properties!!! ridiculous that they can get away with charging, i know they need to make a profit, but it is ridiculous....most are £300 plus for couples....stupidity!!!

landscaperico

Thanks the artful lodger I knew I wasnt crazy, thats really helpful and interesting I cant belive they dont have to have a CRB done seeing as they go into peoples houses and deal with our finacial info MAD!! They get keys to peoples houses!!!! This is so interesting!! Its only £35 for a CRB aswell!! You'd think they could afford it!! I am so astonished!!!

landscaperico

Thankyou CLB its crazy where do these people get off!! How are they not checked!!! I may start a LA tomorrow. lol. Surely there must be a way of regulating these guys!! I cant belive that the government would let people get away with this stuff, its so fundamental.

landscaperico

Sorry again by starter fee I mean the first months rent I'll edit the original message!

Jowo_2

landscaperico wrote: »

Unfortunately i decided against renting the property for the pure fact I was so outraged, at the fee, the lack of clarification as to what it was for and the estate agents attitude. That may change if he reconsciders!.

Did you check the fees charged by other agents in the area before you withdrew to verify if the EA is charging mid-range (i.e. average) fees?

tbs624

Jowo wrote: »

It's the norm for tenants to pay admin fees to the agent which tends to cover activities such as drawing up the contract, taking up references/credit check and so forth.

It's also the norm to pay a month's rent and 4-6 weeks deposit upfront, too.

If you don't want to pay it, rent directly from a landlord.

Typically agencies have to pay salaries for staff, the premises, marketing, transport costs and so forth. They operate as businesses, not charities.

"drawing up the contract" - hitting print button on computer after filling in blanks for names and property address on a pro-forma tenancy agreement and asking parties to sign it.

"taking up references/credit check" - getting T to fill form in, inputting data onto form , hitting send, looking at resultant email from 3rd party checker. Couple of phone calls, letters to bank, employer...reading reply/noting down telephone convo.

This oft-quoted "it's the norm" doesn't make it right. LAs used to charge potential Ts just to register on their "Ts list" and get to see properties. They were prevented from continuing that practice and now this "admin fee" nonsense has grown exponentially and frequently there is little correlation between what the T is told to stump up and the amount of work actually involved.

"They operate as businesses, not charities" How rude. The OP wasn't looking for charity -s/he was querying what amounts to sharp practice. Many LAs effectively act as a cartel on this fees issue, leaving Ts with very little option.

The point is that the LAs already get paid "setting up" charges, plus annual monthly, quarterly or annual commission by the LL on whose behalf they are dealing with the property. LAs effectively "double-dip" by , for example, charging both the LL and the T for a contract.

The credit check charge could be levied on the LL as the LL is able to offset such business costs against their rental income for tax purposes. There is the halfway house option - a T initially pays for the credit check and if it leads to a successful T then those fees are returned to them.

Yes, if the Ts weren't made to pay fees to the LA then the LL may increase the overall rent costs to cover his /her own increased outlay to the LA but at least that way there would be a measure of transparency. For many Ts they don't get to know until the last minute that on top of £xxx per month rent, and £xxx deposit there will be these excessive fees from the LA, who does not work on the Ts behalf.

myothercarisaferrari

this is why I am going private.

One company it was 245 before they would even consider me

landscaperico

Hi Jowo, I did, infact I would have been moving a few meters down the road, and I paid £70 for my admin fees for my house now which is larger and more expensive per month by £150. Apart from that have asked my friend who has a friend who used to work for Thornley groves to ask him if it was standard practice with them.

And thanks TBS I agree entirely!! And thats my point what do they do for their money, you've just come up with a list that I asked for off the LA with prices attached and they cant give it to me because they simply cant justify the costs!! Its crazy!!

All I am looking for like you said is Transparancy!

princeofpounds

Admin fees are often far too high and bear little relation to the cost of actually doing the administration, correct.

However, the cost is probably not quite as low as you think it is - Probably two hours of labour once all the faffing around is included, plus overheads for that time including utilities, rent, business rates, plus the the overhead of failed applications, plus the cost of a credit check itself (thorough ones are more expensive than the cheap ones you highlight as they involve time contacting employers and verifying various details, not just running a credit search with a bureau). But yes, it still won't get close to £180.

However, the fault in your logic is assuming that businesses should always price their products at cost plus a pre-determined 'fair' margin. It doesn't work that way - you go to buy a T-shirt at New Look and it will be cheap. You go to buy one at Gucci and it will probably have cost double to make, but will cost ten times more.

Pricing has little to do with cost (except for the fact that pricing that fails to cover costs means businesses scale back capacity i.e. go bankrupt). They have everything to do with apparent supply and demand (i.e. what the company can get away with).

Now I think this model has problems for lettings, primarily because what appears to be a competitive market often isn't - it's a highly heterogeneous product, meaning that whilst there may be three agents in an area and thirty properties only one or two are likely to be suitable at any one time and the agent may have a defacto monopoly on them. There may also be informal cartel pricing psychology at work. There is probably a better way to do it, but to expect a direct relationship between costs and pricing isn't realistic.

Jowo_2

There is frequently little correlation between what any buyer of goods and services stump up and the amount of work, time or cost actually involved.

I'm not a fan of letting agents but find it strange that tenants, who earn a living through their employers charging as much as they can get away with selling goods/services that cost them as little as possible, don't understand that letting agents work the same way.

Time and time again, tenants demand value for money when the market doesn't favour them and have a bizarre expectation to be charged at virtually cost price for the service they've received. It is the unfortunate case that agents are gate-keepers to access properties that tenants want but when a party in any transaction has the upper hand, then that's what happens. In areas with high number of rental properties and few tenants, its the tenants that have the upper hand negotiating a rent decrease.

A plumber coming to fit a timer for a customer charges greater than the cost of the part and will certainly charge a thumping fee for coming out to fit it, if they can be bothered to come out at all. The customer doesn't get an invoice that says 'the timer only cost me £15 but I'm going to charge you £70, the petrol only cost me £2 and I only needed to use a screwdriver so I'll let you off the rest of the labour charge'.

I wouldn't book a plumber without getting a quote and I don't understand why people look at rental property without checking the fees first. If a tenant is close to accepting the offer of the tenancy and hasn't asked upfront what the admin fees are, its their own fault they've wasted their own time.

I think there should be a sticky at the top of the page, like Miss Moneypenny's to address the number of posts that say 'ooh, the letting agent only spend 5 minutes bashing out a photocopied contract and 10 mins showing me round the property, why is it costing me £x'.

I don't understand the purposeful amnesia that ignores that a letting agent has to find income to support the entire infrastructure of the business - the website or advert the tenant saw the property on, the PC where they corresponded through email, the telephone where they booked the viewing, the car the letting agent used to drive there and their wages, the photocopier that copies the documents, the office where they signed the contract, the time/effort spent getting landlords properties on their books, etc, etc.