Renting - Advice on various Admin Fees/Bond...

staks

Good day,

I was wanting some advice on just how far letting agencies can go in terms of fees and bonds etc.

My wife is permanantly disabled and I claim carers allowance, housing benefit etc. We applied for a rented house that is a little over the alloted amount the council authority will pay, but we were willing to make up for that out of our other state income.

The letting agency, after some discussion agreed to let us the property with twice the bond, a tidy £1800. We agreed to this, with the fact its held by a 3rd party and we are confident we can keep the house in ship shape.

However I am beginning to feel a little weary with the letting agency. They seem nice face to face and on a character level I have no quarms. However we have already paid £350 non refundable fees Made up of £200 setting up fee which is the going rate, and £75 each for credit check which seems steap.

It has now come to light that we need to pay an extra £200 utilty bill bond, in case we leave the house with outstanding utility bills. I was under the impression the contract would be between me and the utility provider, so if I moved away with outstanding bills, it wouldn't be the responsibility of the landlord to pay anyway? Would he have trouble geting the elecricity back on, for example? It is worth to note that we have never been in debt and pay all our bills on time by direct debit. However I can see from their point of view we could be anyone.

Also, I am now told that I need to have House Contents insurance before I move in. No problem. However, if I don't use their own accredited insurer, with commission to themselves I expect, that I am liable for a £25 admin fee! Where does this come from? Can they legally charge me this? The quote they gave me is £180, when I can get quotes online with accidental damage and away from home cover for less than £150.

It's these 2 extra small things which make me nervous. I feel that in 5 years time when I move home, this company is going to try everything in their power to keep my huge bond. I have already paid £350 and am now beginning to feel that it would be worth my while to walk away, as that £1800 bond would never be returned.

Am I being unreasonable with this train of thought? Your views are very welcome.

clutton_2

this letting agency is ringing alarm bells with me ...... and i have been a LL for 11 years.....

did the LA not mention the Deposit Protection Scheme which came into force in April 2007 in England and Wales (not Scotland)

Taking a utility deposit is wrong also for exactly the reasons you have identified....

you cannot be forced to take our your own contents insurance... neither can they charge you for reading it...

what exactly is this £350 non-refundable fee for ? do you have it in writing ? - i just saw this ""Made up of £200 setting up fee which is the going rate"

if you do not take a tenancy with them then can you get the £200 back ?

£75 is not unusual for credit checks...


how much is your monthly rent ? - as there are limits on how much bond a LL can take.....

i would be looking for somewhere else....

have you gone to your council to ask them for their list of Accredited Landlords whose properties and business practice are up to a good standard

staks

The receipt for the £350 is down as:

£123.40 Reference Charge
£174.47 Tenancy Set Up Charge
£52.13 VAT
£350

It also specifically states it non-refundable.

The bond does go with an assured scheme they said, I haven't the specifics yet however. We don't pay or sign anything until next month.

I am seeing them again tomorrow for a second viewing. I just wanted to take measurements and photos so we can plan the move, we have already agreed to have the house verbally and paid the mentioned £350.

When I see them tomorrow I am going to push to have the £200 utility bond and the £25 insurance fee waived. If I'm not satisfied with the response I think I'm going to walk away.

I really like the house and it would be a shame to not have it, I'm just having those dreadful second thoughts. One minute I'm ready to go through with it, next I feel like I'm being mugged.

Enfieldian

Clutton is, as always, the voice of fact, law and logical reason, he has hit the nail on the head in his post.

Just remind the agents that, other than reference fees, they make their money from THEIR CLIENT, the landlord.

They do not act for or represent the tenant(s) in any way.

eco-friendly_2

staks wrote: »

Am I being unreasonable with this train of thought? Your views are very welcome.

No you're not, <shakes head>

tbs624

clutton wrote: »

did the LA not mention the Deposit Protection Scheme which came into force in April 2007 in England and Wales (not Scotland)

the OP says

staks wrote: »

The letting agency, after some discussion agreed to let us the property with twice the bond, a tidy £1800. We agreed to this, with the fact its held by a 3rd party and we are confident we can keep the house in ship shape.

which perhaps suggests that they have been made aware of the tenancy deposit regs?

Staks - that huge bond, does it equate to more than two months rent equivalent? If it does it is likely to be seen as a premium rather than a deposit: a good explanation of the ramifications of this can be found here

Agree with Clutton on household insurance - by seeking to impose a £25 fee if you get your own insurance cover this LA would seem to be trying to pressurise you to use their "in house" insurance provider. The OFT have suggested that the LA should merely state that they are "able to offer a competitive quote should the T require insurance"

wrote:

the receipt for the £350 is down as:

£123.40 Reference Charge
£174.47 Tenancy Set Up Charge
£52.13 VAT
£350

At this stage of the proceedings, should you walk away, then they can only retain a "reasonable " amount for the work they have completed and IMO that would be the referencing charge plus VAT. They wouldn't "set up" the tenancy until they had all the relevant information. The 75 quid referencing charge should cover the third party "credit check" plus a bit of phoning around. A third party check costs between 15 and 50 quid but larger LAs get discounts on those fees.


Being asked to pay a Utility Bond is not acceptable - your contract for utilities is a direct one with the supplier. A LL may be worried that they will end up having to have a prepayment meter installed if they have a succession of Ts who fail to pay their bills, but that does not entitle them to impose a levy on you at the start of your tenancy. If you really want this property, you can simply show them evidence that you have never had any problems meeting your utility bill payments.


To protect themselves from this type of shoddy practice, all Ts should ask for a clear written statement from the LA detailing *all* fees payable by the T (including any "renewals fees" due when the Fixed Term expires) *before* the T signs or pays a single penny of any holding deposit etc.

You may want to discuss the way in which this LA operates with both the Trading Standards Office and the local Private Sector Rentals Team at the local Council.

As Clutton says, its best to check in advance whether the Council runs any form of accreditation scheme for private sector LLs and if yes, use one of them.

david_bedford_2

Credit Checks for £75 are standard, however these are the fee's that are unrefundable. we pay £50 each.

if you pass the credit checks then the next step would be to pay the 6 weeks rent & admin fees.

those admin fees sound about right.


what i have learn is not be afraid to ask questions, at the end of the day LA's are there as a business to make money, first off ask them for a draft copy of the tenancy agreement and make sure that the money is held in a deposit scheme. if it's not do not rent the property!

Wev'e been renting for about 10months and moving, i beleive we paid £1100 which consisted of :

6 weeks rent £750
Credit check & Admin fees £350.00

However half of the 6 weeks rent went into a deposit scheme which is part of the clause in our tenancy agreement.

tbs624

david_bedford wrote: »

......those admin fees sound about right.

Just because its what a lot of LAs seem to charge does not make it "right" - there will effectively be a "cartel" on those fees in any given area.

david_bedford wrote: »

what i have learn is not be afraid to ask questions, at the end of the day LA's are there as a business to make money,

...and without Ts they would have no business. It's worth saying again that there is no requirement to have any training, specific expertise or qualifications before setting oneself up as an LA, and fleecing both LLs and Ts with the charging of spurious fees and a rule book that gets made up as you go along.

david_bedford wrote: »

first off ask them for a draft copy of the tenancy agreement and make sure that the money is held in a deposit scheme. if it's not do not rent the property!

Good suggestion

david_bedford wrote: »

6 weeks rent £750
Credit check & Admin fees £350.00

However half of the 6 weeks rent went into a deposit scheme which is part of the clause in our tenancy agreement.

It's either rent or it's a deposit. Statute governs how your tenancy deposit should be dealt with, not the terms of your contract.

Enfieldian

david_bedford wrote: »

Credit Checks for £75 are standard, however these are the fee's that are unrefundable. we pay £50 each.

if you pass the credit checks then the next step would be to pay the 6 weeks rent & admin fees.

those admin fees sound about right.


what i have learn is not be afraid to ask questions, at the end of the day LA's are there as a business to make money, first off ask them for a draft copy of the tenancy agreement and make sure that the money is held in a deposit scheme. if it's not do not rent the property!

Wev'e been renting for about 10months and moving, i beleive we paid £1100 which consisted of :

6 weeks rent £750
Credit check & Admin fees £350.00

However half of the 6 weeks rent went into a deposit scheme which is part of the clause in our tenancy agreement.

Fair post, but the "admin fees" should be paid by the Landlord.

This is just an opportunity for the agent to make extra money for nothing, if the tenant has passed a credit check and signed the stock standard AST, what else is there?

Landlord pays (or SHOULD pay) for the check in inventory, or do it themselves.

Case in point, the last time I rented the agent wanted £150 for references for two of us, they also asked me for 3 months bank statements, payslips and a letter from my employer (which I had to request) I never found any kind of search against me from the credit reference agency so it is likely that they just pocketed the £150 and used everything else to cover themselves.

staks

I went to see the LA today and went over a few points.

The £25 admin fee is to ensure the insurance I have covers their minimum requirements (notably accidental cover), that the LA is an "interested party" on the cover to ensure I can't cancel it without their knowledge.

In the end I got their quote which was reasonable and competative after running through quotes on the internet.

However I asked a question I read on these forums a few times about a Section 21. The guy thoguht a Section 21 is something given to every tenant as part of their agreemant signing and had never thought it was done otherwise. I tried to explain that a Section 21 destroys my notice period but they didn't seem to grasp my worries.

Am I correct in that by serving a Section 21 then at the end of my fixed term they can go straight to court without notice? After serving a Section 21 can they go to court DURING my fixed term?

If they try and show me an S21 at the tenancy signing can I make it clear that I don't accept the S21 or just by them handing it to me has the act already happened and if I sign there is nothing I can do about it?

I don't expect to have any problems. I am an example tenant who has been in their house for 10 years without issues. All these years I have felt safe here, I am just worried that should the LL have difficulties in the future I could have the house pulled from underneath us.

I'm with a housing association at the moment and it was all so much simpler than this

clutton_2

""Am I correct in that by serving a Section 21 then at the end of my fixed term they can go straight to court without notice?""

provided they have served it correctly then yes...

however they need to have lodged the deposit and provided oyu with the prescribed information about the deposit scheme the use before they can issue a S21 notice....

if it comes as a part of your tenancy just dont say anything.. as it would be judged "not-served" if it ever came to court


""The £25 admin fee is to ensure the insurance I have covers their minimum requirements (notably accidental cover), that the LA is an "interested party" on the cover to ensure I can't cancel it without their knowledge.""

this is rubbish utter rubbish... it is NOT compulsory for any tenant to take out insurance.... the LA is NOT an interested party and the contract for insurance rests solely between tenant and insurer and is nothing whatsoever to do with the LL or LA

"accidental cover" - if the LL has good Buy to let insurance, any accident which is the fault of the property or the negligence of the LL/LA will be covered by the LLs insurance....