Rent Admin Fee

landscaperico

I agree with the T shirt analogy, and the same could be said about cars, and furniture and all sorts, however the difference being, I can choose to go to a Gucci shop or Top Man, i pay for the fact that Gucci are a top brand, but when a house that is on for less p/m than the house we are currently in (so you could class it as a lower brand), charges more than double in Admin fees than the more expensive place (top brand) there is something fundamentally wrong with the system, surely there should be a regulatory body who monitors and sets a limit.

landscaperico

Sorry Jowo but I dont agree, if for example I ask a plumber out I do get a quote on it it has time, call out fee and cost of parts.

I'm not suggesting either that the LA shouldn't make money, of course it should its a buisness, however they are getting paid by the LL already, and I agree some cost needs to be taken on by the Tenant because if for example a credit check fails then they are out of poket, I also agree that you should always go into a deal with your eyes wide open and ask for all the charges up front.

However, please tell me, how being a cheaper property but a different agency (but reciving the exact same service) means that they get to charge me, the buyer more and how these prices vary greatly from one house to another in the same price range and area on the market.

How can you (the LA) tell me I am paying for your time and money spent on showing the property. Your basically saying do you like my advert, yes, great okay that'll be X for the product oh and X for the advert to, well you did like the advert. Normally this may be acceptable and the price would be incorporated in the product but when they have already been paid by the Land Lord, what gives them the right to charge twice. The landlord will already have incorporated the costs to the LA in the price of the rent, I expect that.

rla_john

Things that would justify a landlord/agent having to pass an admin fee onto the tenant:

Credit check - £10 to £25
Tenant Referencing - £15 to £30
Inventory Clerk, Check in/out, etc - £40 to £100
Deposit protection - Up to £90
Licensing - More and more landlords are being subjected to HMO licensing, Selective Licensing, etc.

Long gone are the days when a landlord only has to worry about covering the mortgage, insurance and maintenance.

J

princeofpounds

there is something fundamentally wrong with the system, surely there should be a regulatory body who monitors and sets a limit.

I *do* agree that the pattern of pricing seems odd, and there probably is something wrong with the system. I'm just pointing out that complaining about the profit margin kind of misses the point as it is only part of the story.

You see a similar thing with the big energy and utility companies... huge profits are announced, a hundred forums buzz with comments like 'it's so terrible they make a billion pounds profit when I struggle to pay my bill', and people just generally aren't aware that the company probably spent ten billion pounds of its own (and shareholders and lenders) money to generate that profit.

Note i'm not comparing EAs to oil companies here! Just illustrating how people tend to criticise margins as an inherent evil.

Normally this may be acceptable and the price would be incorporated in the product but when they have already been paid by the Land Lord, what gives them the right to charge twice.

I also think this is a big problem with the system - it always begs the question of who is actually employing the agent and for what services with what duty of care.

tbs624

rla_john wrote: »

Things that would justify a landlord/agent having to pass an admin fee onto the tenant.....
Deposit protection - Up to £90
....

Absolutely not - there are three deposit schemes and one of them is free to use. The Tenant does not choose which scheme is used, the LL does.

If the LL makes a choice to use one of the two insurance-based schemes who charge fees then quite simply its the LL who should pay those fees.

As I've posted before on here, how wrong can it be that one party to an agreement makes the choice and the other party picks up the tab?

This charging issue should have been addressed within the deposit regulations themselves.

axomoxia

Jowo wrote: »

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.

Isn't the agent also getting a % of the rent off the landlord as well? Its been a while since I last rented a place, but I understood this was how the Agent made money from the landlord? I don't remember paying any "admin fees" when I was last a tenant.

landscaperico

Hi Princeofpounds, I dont have a problem with them having large profit margins, but when they have justly earnt them, in this case I feel they are seriously over charging and taking the biscuit, they should make a profit and a healthy one, I need them along with millions of other people these guys are a neccesity, however their profit should come from the LL not the tenant. The LL wants his place advertised and to let his house, surely to increase the chances of this happening the costs to the tenant should be a fair price. I havent moved and have stayed where I am mainly on the principle that I found it such an unfair figure (the £185) and I'm actually trying to get in contact with the LL to tell him why we have not gone ahead. i think he should know. I'd want to!

rla_john

tbs624 wrote: »

Absolutely not - there are three deposit schemes and one of them is free to use. The Tenant does not choose which scheme is used, the LL does.

If the LL makes a choice to use one of the two insurance-based schemes who charge fees then quite simply its the LL who should pay those fees.

As I've posted before on here, how wrong can it be that one party to an agreement makes the choice and the other party picks up the tab?

This charging issue should have been addressed within the deposit regulations themselves.

It may be unfair that the costs for deposit protection should be passed onto the tenant, especially when there is a free scheme out there, but the fact remains that two of the schemes come at a cost.

Unfortunately, the decision on how a deposit is protected is a business decision, for example if the landlord wishes, for whatever reason, to hold onto the deposit, then an insurance policy must be paid for.

The best advice I can give, is for you to ask the landlord if he/she can protect your deposit with the custodial scheme (depositprotection.com) which is the free scheme.

Finally, when you state " If the LL makes a choice to use one of the two insurance-based schemes who charge fees then quite simply its the LL who should pay those fees. ", does the same thought not relate to tenant credit checks or tenant referencing ?

Are you saying that a landlord should not check the credit worthiness of a tenant unless he is willing to take the hit on the cost of those checks?

My point is that landlords are a business and that business has costs associated to it - costs that must be recouped in some way shape or form, so if you are not going to be subjected to admin fees, you will only see rent levels increase.

J

tbs624

princeofpounds wrote: »

I *do* agree that the pattern of pricing seems odd, and there probably is something wrong with the system. I'm just pointing out that complaining about the profit margin kind of misses the point as it is only part of the story...

I'm not sure that anyone was saying that it is the full story - see my additional comments about exactly who is getting "the service" and the fact that LAs are in effect playing a game of "double your money", ie the money in their coffers, by charging to both LL and T.

princeofpounds wrote:

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)

If you want a T shirt - you have many choices and price levels, right down to jumble sales and charity shops. If you are an idiot who likes labels and vanity dressing then I have no issue with a Gucci fleecing you for the "privilege" .

If your gas and elec bills are too high you can adjust your usage, layer up those T shirts from the charity shop and switch providers to keep the costs down.

If you need a roof over your head in the private sector, however, you may find that you have very few opportunities to shop around because the local LAs keep the admin fees at a similar level to one another.

Your comment about "what they can get away with" is at the very heart of this - a huge number of LAs are unqualified,untrained, unregulated and *are* currently getting away with royally ripping Tenants off (and LLs in some cases too). It's time the practice was stopped.

landscaperico

Thankyou TBS, I totally agree with you, read theartfullodgers post on page one!! Really interesting and shocking stuff!!