Letting agent charges - reasonable or not?

wonderman

We are first time renters and we have just viewed a property to rent and received the LAs terms and conditions. The up front non refundable arrangement fee is 30% of one months rent + VAT + £35 per adult tenant. It strikes me as a large sum of money effectively additional commission for the LA - especially as the house is close to £2000 per month - this all comes to about £750.
Are these amounts of money normal or is there a wide variation?

clutton_2

how many of your are moving in ?

nikki1520

In my experience, it's the landlord that pays the fee to the agent - maybe this is a new way of shifting it to the tenant? I would expect a credit check fee of between £50 -£150 per adult signing the lease on your side, and the agent to get his fee - normally one months rent from the landlord. Is it a manged tenancy? Or are you in Scotland? Not sure, but maybe they do lettings differently there

wonderman

There are 2 adults - and it is in England. I was shocked to be asked to pay this amount. I expected a credit ref fee of maybe £100 total. I expected the LA to be paid by the LL not the renter. Looks like the LA is paid by both now. This amount adds 5% to the rental price taken over 6 months.

theartfullodger

The charges are entirely unreasonable & unfair.

Agent is probably charging landlord also.

However, if those are agents terms & they won''t budge, your only choice is accept them or go elsewhere...

Sorry. This wonderful new government of ours decided to cancel the planned regulation of letting agents.. Gordon wasnae all bad....

alunharford

LL probably doesn't know.

I've had this situation in the past. I got the fees in writing from the LA, looked up the landlord's address in the land registry and sent him the fees document anonymously.

At least it made me feel better.

tbs624

wonderman wrote: »

We are first time renters and we have just viewed a property to rent and received the LAs terms and conditions. The up front non refundable arrangement fee is 30% of one months rent + VAT + £35 per adult tenant. It strikes me as a large sum of money effectively additional commission for the LA - especially as the house is close to £2000 per month - this all comes to about £750.
Are these amounts of money normal or is there a wide variation?

In many areas LAs operate almost as a cartel over these and other spurious "admin" fees.

LL will also get charged for "drawing up" a tenancy agreement etc. so LA is effectively getting two big bites of the apple. Third party "credit checks" on Ts actual costs vary between circa 15 quid to 60 quid, depending on firm used by the LA,, amount of discount LA gets for bulk usage and how in depth the actual checks are.

I personally think that no LA or LL should be able to charge a T any sort of fee other than a "reasonable" credit check fee but, even if any other fee could be justified, IMO it certainly should not be payable before the credit check results are known and a copy of the tenancy agreement has been passed to the T for advance perusal.

I would challenge the "non-refundable" element of that fat fee - if you declare all the correct info and you are not acceptable to them under their "scoring " procedures I doubt very much that they would have done 750 quid's worth of work. If the LL decided not to proceed for any other reason, then the LA should not be able to retain such a huge fee from a potential T.

Many LLs who self-manage their properties only charge a fair fee for credit referencing - maybe you should try contacting the local LL association or ask the Council if they hold contact info for accredited private sector LLs.

G_M

Agree with all the above comments. It's not uncommon, but it is unfair.

As said, the LL will also be paying a fee and probobly has no idea his potential tenants are being hit like this. It rebounds on HIM of course, as some potentially excellent tenants will refuse to pay and go elsewhere (leaving his property empty longer) and if they DO move in they will start off their tenancy feeling cheated and therefore less likely to be 'good' tenants.

Let the agent know you're unhappy. Pin them down as to exact terms for refund ie if you fail credit check or LL simply decides to let to someone else. Insist on the terms being amended. In my opinion the only justification for an agent to keep fees is
a) to cover fair cost of doing tenant vetting
b) if property has been taken off the market for the tenant and the tenant then changes their mind

Or find another agent/property.

And as Alun says, pay the Land Registry £4 to find the owner (landlord) and let him know. As a LL, I'd be very grateful to know what my agent was doing (and would happily re-imburse the £4, but don't expect that!)

wonderman

Thank you everyone for your replies. I am going to call round a few other local agents tomorrow to see what they charge then I will call the LA.
The replies echo my own sentiments entirely. We will be good tenants and are happy to pay the asking price - but now to have to pay another £125 per month (effectively) seems unreasonable.
I am pretty sure that the LL will not know what the tenants are being charged - it did not occur to me to ask the LAs when we were looking at putting our own house on the rental market.
Useful link re the land registry - did not know that it was so easy to find out this information.
Will update you on how we get on.

g_attrill

I wonder if these fees are ever negotiable or is there enough demand for them to just get away with it?

You could say "we have a budget of £X and with the deposit these fees are far too much, we prefer this house over the other few we have seen [mention you are using another agent] but it is not affordable, can you do anything with regards to the fees?". If not, then walk.

dawyldthing

i've rented a few times and never paid the fees as i've always found the houses on gumtree or somewhere online. There is a lettings side on rightmove too, don't think its private landlords tho