Letting agent fee - seems unfair - any advice?

CaraC81

Hi everyone – I was hoping there may be someone that could give me some advice please.

I moved in to a rented flat on 10th of December 2011. Prior to moving in my husband and I paid £200 in fees to the letting agent (charged at £100 per person living in flat), which included a credit search. At the time the letting agent said they would only lease the flat for 6 months in the first instance to ensure that everyone (them/us/landlord) was satisfied with the arrangement before extending the contract. They told us that we would be sent a ‘Section 21 – Notice Requiring Possession’, but not to worry, it was simply a formality. At this stage we were to call the agent and ask for the contract to be extended. This is exactly what has happened – but unexpectedly the letter confirming the tenancy renewal includes a demand for £150 of renewal fees (£75 per person) – and a statement that this is a conditional offer which is dependent on us passing further credit checks. We must pay the money by 1st of May.

I find another fee and credit check within such a short space of time to be outrageous. I am guessing this is perfectly legal, as the agent is a legitimate one – but it feels like extortion. We will not be putting ourselves through the inconvenience of moving due to the fee – but this is a disgrace.

We are very good tenants – the agent knows that we would ideally like to live there for another 2 – 3 years – and we always pay our rent early (usually 7 – 10 days early). They have carried out a 3 month inspection and found no fault with the flat under our care.

Any thoughts on how I can address this matter with the agent, without it turning unfriendly?


Thanks,

Cara

giraffe69

I don't blame you for being outraged. This seems to be simply a (dodgy) money making venture. I would ask the agent to justify the need for further credit checks, in writing, as a starting point.
What does the owner think of this? You might ask.

Fosterdog

My brother has been looking for somewhere to rent recently and found that a lot of letting agents are now doing this.

I spoke to one agent to find out why and he said it's basically to have a new fixed term tenancy put in place (another 6 or 12 months) so the tenant doesn't leave the landlord without proper notice and to stop the landlord trying to evict the tenant too soon.It also helps them get rid of bad tenants. He did say though that it's not compulsory and as long as both tenant and landlord agree to go on a month by month basis there is no tenancy renewal and no charge.

pinkshoes

Ignore and do nothing. You'll just go onto a rolling contract. If they keep harrassing you, just write directly to the landlord, say you're good tenants and intend to stay long term, but do not want to keep paying HUGE agent fees every 6 months, so would prefer a periodic tenancy rather than a fixed one for this reason alone.

squeaky

Hi Cara

The experts on our housing board will be able to help you with this one, so I'll move the post across for you.

Good luck

Forum_Team wrote:

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL='forumteam@moneysavingexpert.com']forumteam@moneysavingexpert.com[/EMAIL]

arabellaB

An agent fee is required as long as its not overpriced.

DVardysShadow

arabellaB wrote: »

An agent fee is required as long as its not overpriced.

I want a bacon sandwich.

Cara, ignore this poster. They are preparing to spam us, I believe.

princeofpounds

The basics have already been outlined, but to collate it together:

- You do not need a renewed tenancy to stay in the property. If the landlord is happy with it, you can go onto a statutory periodic tenancy simply by doing nothing and carrying on as normal. The only downside to this is that you do not get fixed-term security. The landlord must give you 2 months notice to leave, you must give 1 month (both to coincide with a rental period). But if you have a good relationship this is not such an issue.

- The landlord is probably being kept in the dark about the fees, or being duped into believing it is an absolute necessity to secure a fixed term (quite common), or possibly just disinterested. You might find that the agent is also charging the landlord a fee for renewal. So direct dialogue is probably a good idea to find out what is really going on. You might wish to point out that every £150 you spend on fees is £150 out of your accomodation budget, although this might suggest you could pay a higher rent!

- The agent is, unfortunately, entitled to ask for whatever they want in fees if this is work they are not already contracted to perform for the landlord. They are probably due a small fee for printing off and organising a contract, plus associated overheads (don't underestimate those - £50 would not be unreasonable).

- Credit checks are however quite unreasonable unless the landlord is paranoid and wants them repeated for some reason - if you have money problems now you are in the property and it will bite the landlord anyway, plus you have already established the best credit check of all; a record of consistent payments.

- If your landlord is the one insisting on a fixed term and you don't mind, you might suggest to them that they pay the fees if they want it so badly as it will be done for their benefit.

- If your landlord is annoyed with the situation too, you might wish to suggest that he threaten to ditch the agent. This might be tricky if they have tied him into a disadvantageous contract however.

- Unfortunately there are no fully satisfying answers to solving the problem of this sort of behaviour from LAs, who are essentially using the business practice of 'gouging' (stinging people for a necessary service when you have them tied into a legal bind somehow) . Whilst the 'simple' answer is for LLs and Ts to walk away from agents who ask for outrageous fees, it's a little bit hard in practice sometimes to cut out of agency contracts or put your own AST together if you are an amateur landlord.

- Thankfully good communication, statutory periodic tenancies and a little bullying of the agent by the landlord can often produce a workaround. Good luck.

Werdnal

Read this thread:

https://forums.moneysavingexpert.com/discussion/3872471

Where several replies (including mine) explain how an SPT - Statutory Periodic Tenancy, works. You DO NOT ever need to sign a renewal of the tenancy BUT remember this can reduce your security of tenure in the property, as without a fixed term, the LL need only give you 2 months notice of possession.

However, Agents like to pull wool over the eyes of their tenants and will also usually charge the LL for renewal fee. This actually is quite a small fee, as we get regular posts here quoting much higher charges, for basically changing a couple of dates on the existing agreement, pressing print on the PC and lending you a pen to sign on the dotted line.

Tell the agent you want to go to an SPT - your legal right, but remember that this can result in 2 months notice should the LL want the property back. However, LL may not know this either, and be paying the agent to renew from his side to, when there is no need.

By the way, when did the S21 actually arrive? If is was issued to you at the start of the tenancy, and BEFORE your deposit was protected, this too is invalid. Letting agents are notoriously ignorant of tenancy law - unless is comes to ways of lining their pockets that is !

CaraC81

Thank you so much for your help everyone. I'll look through my paperwork to check if I have the landlord's contact details. If so, I think I'll have a quiet word with him before tackling the letting agent. I have until the 1st of May to pay the fee. The landlord seemed like a really reasonable guy - he was at the flat re-decorating when we went to view it originally. At that time we asked him if he would be putting a washing machine in the kitchen, he said not unless it would prevent us from letting the place. We said it would - so he had a brand new machine installed before we moved in. I'm pretty sure he just wants someone in the property taking care of it and paying the bills on time.

Werdnal - our S21 arrived on Saturday (24th March). Our tenancy started on Saturday the 10th of December - and we had paid fees and deposits about a month before we moved in.

Thanks again!
Cara

TheCatCameBack

Lots of EAs charge this fee, and they will also charge the landlord the same fee (but usually higher). However, another credit check is baffling.

The way around it is to go on a rolling contract, however, as well as not having the fixed term security of staying there, the rent can also be increased outside of a fixed term (it can also be done during, but it less frequent). Perhaps the EAs would take a staggered payment over a few months?

You should have the landlord's address on your tenancy agreement but if the EAs manage the flat you probably won't have anything else (phone, email).