Deposit Charge and Check-out Charge

ollyver27

Hi againnn...

You've been really helpful so far so thanks

I have another question (hopefully my last!) - In my contract which I have signed, they charge me £40 for 'cost of placing my deposit into the tenancy deposit scheme', and they also charge me £20 for a 'check out fee':

'As your deposit will be placed in the tenancy deposit scheme - there will be a deduction of £40 from the bond at the end of the agreement. This is the cost that <Letting Agent> has to pay to tds.gb. com in order to protect your bond. If the contract goes onto a rolling month by month contract (it has) then the fee of £40 will cover this period of protection unless the name on the tenancy agreement change (they haven't)'

AND

'Upon the day of vacating the tenant will be responsible for the tenancy check out fee which is £20 for unfurnished (it is) and £35 for furnished properties. The agent will attend and ensure meter readings are taken and the property is being returned in the condition in which it was handed to the tenant(s).'

Is this common? It just seems totally unfair that I've been a good tenant, but they are making £60 out of me for absolutely nothing!

lighting_up_the_chalice

ollyver27 wrote: »

Hi againnn...

You've been really helpful so far so thanks

I have another question (hopefully my last!) - In my contract which I have signed, they charge me £40 for 'cost of placing my deposit into the tenancy deposit scheme', and they also charge me £20 for a 'check out fee':

'As your deposit will be placed in the tenancy deposit scheme - there will be a deduction of £40 from the bond at the end of the agreement. This is the cost that <Letting Agent> has to pay to tds.gb. com in order to protect your bond. If the contract goes onto a rolling month by month contract (it has) then the fee of £40 will cover this period of protection unless the name on the tenancy agreement change (they haven't)'

AND

'Upon the day of vacating the tenant will be responsible for the tenancy check out fee which is £20 for unfurnished (it is) and £35 for furnished properties. The agent will attend and ensure meter readings are taken and the property is being returned in the condition in which it was handed to the tenant(s).'

Is this common? It just seems totally unfair that I've been a good tenant, but they are making £60 out of me for absolutely nothing!

It is totally unfair. Have a look at section 7 of the TDS guide to deposits disputes and damages (the scheme your LLs agent uses)

https://www.tds.gb.com/resources/files/2013/A%20guide%20to%20deposits%20disputes%20and%20damages.pdf

7. Standard agency charges
While it is accepted that agents can insert standard fees into their Terms of Business, tenants can challenge these. If they are considered to be unreasonable, it may not be possible to claim them. Landlords and agents should be aware that the deposit should only be retained for breaches of the tenancy agreement causing a financial loss and not a failure to pay standard agency fees.
However, standard agency fees can be inserted into the agent’s own terms and conditions which accompany the signing of the tenancy agreement, on the agent’s website and, increasingly, in the tenancy agreement itself.
We accept that these standard fees are put in place to deter tenants from breaking the terms of their contract. But if the agent seeks to retain these fees without question, then it is arguable that they should be kept distinct from the deposit and separate invoices raised to the tenant. Alternatively, the fees would have to be explicitly explained to, and agreed by, the tenant when he signs the contract.

ollyver27

lighting_up_the_chalice wrote: »

It is totally unfair. Have a look at section 7 of the TDS guide to deposits disputes and damages (the scheme your LLs agent uses)

https://www.tds.gb.com/resources/files/2013/A%20guide%20to%20deposits%20disputes%20and%20damages.pdf

7. Standard agency charges
While it is accepted that agents can insert standard fees into their Terms of Business, tenants can challenge these. If they are considered to be unreasonable, it may not be possible to claim them. Landlords and agents should be aware that the deposit should only be retained for breaches of the tenancy agreement causing a financial loss and not a failure to pay standard agency fees.
However, standard agency fees can be inserted into the agent’s own terms and conditions which accompany the signing of the tenancy agreement, on the agent’s website and, increasingly, in the tenancy agreement itself.
We accept that these standard fees are put in place to deter tenants from breaking the terms of their contract. But if the agent seeks to retain these fees without question, then it is arguable that they should be kept distinct from the deposit and separate invoices raised to the tenant. Alternatively, the fees would have to be explicitly explained to, and agreed by, the tenant when he signs the contract.

Thanks, that's really helpful. I especially like the bit:

'For example, the Office of Fair Trading provides guidance on unfair terms in tenancy agreements (Unfair Contract Terms Act 1977). A clause which is inserted into a contract will not automatically be deemed to be a fair clause just by virtue of its presence. The
adjudicator needs to consider the merits of each case in order to decide whether the clause is reasonable.'

However, I doesn't the following cover them?

'Alternatively, the fees would have to be explicitly explained to, and agreed by, the tenant when he signs the contract'

As I did sign this in a tenancy agreement...

BitterAndTwisted

The TDS is an insurance-based deposit-protection scheme and they are seeking to recover the cost of the premium from you. The time for querying that charge was before you signed the contract.

On the other hand that £20 charge for the check-out sounds extremely reasonable. This is presuming that the landlord paid for the original check-in which you signed on or after entry

lighting_up_the_chalice

If you don't agree to a deposit deduction and cannot reach a negotiated settlement, the TDS adjudicator makes the final ruling. The above gives an indication of their opinion (ie "Landlords and agents should be aware that the deposit should only be retained for breaches of the tenancy agreement causing a financial loss and not a failure to pay standard agency fees. "). I'd be quietly optimistic.

Edit... A difference of opinion, I see. I guess only time will tell.

ollyver27

lighting_up_the_chalice wrote: »

If you don't agree to a deposit deduction and cannot reach a negotiated settlement, the TDS adjudicator makes the final ruling. The above gives an indication of their opinion (ie "Landlords and agents should be aware that the deposit should only be retained for breaches of the tenancy agreement causing a financial loss and not a failure to pay standard agency fees. "). I'd be quietly optimistic.

Edit... A difference of opinion, I see. I guess only time will tell.

Thanks for both of your inputs - I suppose the argument being should I be paying for one of their costs - but this is just an opinion based matter I suppose.

In terms of process then, if I get the deposit back, minus the two costs outlined (deposit fee and check-out costs), would I then raise a dispute, should I wish, and it is then investigated? Or do I contact my letting agent and signal my intent, and try to come to a negotiated agreement?

I ask because I am a bit worried about their reference. I will be moving into another rented property which will reference check me, and don't want to receive a bad reference. If I was to speak to them before I raised a dispute, they obviously won't be happy, and would this then affect my reference from them? And if I just went straight to the tds to raise a dispute, would this also affect my reference I receive from them?

Thanks again, this forum always helps!

Yorkie1

It is not unusual for there to be either a check-in or check-out fee. As that was in your contract and is generally accepted to be an enforceable / reasonable term, you're unlikely to win that challenge.

Stick to the deposit fee argument.

ollyver27

Yorkie1 wrote: »

It is not unusual for there to be either a check-in or check-out fee. As that was in your contract and is generally accepted to be an enforceable / reasonable term, you're unlikely to win that challenge.

Stick to the deposit fee argument.

Ok, seems to be the general consensus is that the £20 charge is pretty reasonable, it's just the £40 which I can go at.

But would this affect my reference from them at all?

martindow

ollyver27 wrote: »

But would this affect my reference from them at all?

Probably, but you would get the reference for a new rental before you leave. You would put in your claim for the deposit after moving into your new home.

martinsurrey

ollyver27 wrote: »

Ok, seems to be the general consensus is that the £20 charge is pretty reasonable, it's just the £40 which I can go at.

But would this affect my reference from them at all?

All of the TDS rules people have quoted have shown that the agent shouldn’t retain the fees from the deposit, but not that the fees are not payable (ie they should be separately invoiced).

If you argue about the fees they’ll just invoice you for them and then send them off to debt collectors if you don’t pay.

For the sake of my sanity, I would just let it slide, especially as they were upfront about them when I signed.

ollyver27

martinsurrey wrote: »

All of the TDS rules people have quoted have shown that the agent shouldn’t retain the fees from the deposit, but not that the fees are not payable (ie they should be separately invoiced).

If you argue about the fees they’ll just invoice you for them and then send them off to debt collectors if you don’t pay.

For the sake of my sanity, I would just let it slide, especially as they were upfront about them when I signed.

Or I could put a dispute in, and if they invoice separately, then just pay (to avoid insanity )