Fees for finding subsequent tenants

blued

Hi all,

I'm currently renting my house out while working overseas. The initial tenant has left and the agent arranged for another tenant to move in. The first month's rent came in very low and when I questioned it he advised that the deduction was for a completely new inventory and reference checks for the new tenant. The charge was 50% of the initial £295+VAT setup fee. I'm 99% sure that he advised me (verbally) when I agreed to sign with him that there would not be a fee for arranging subsequent tenants. The contract is vague, it states fees are fixed for the first tenancy and any changes in the future must be agreed by both parties prior to new tenancies starting.

Can anyone who uses an agent advise if the fees are normal? When I questioned it he said they normally charge 50% of the initial setup fee and doesn't remember telling me different but if I disagree he will refund the fee. I find it a little strange he is so quick to say they will refund, it almost sounds like they were chancing their luck with the fee?

I'm also confused as to why a fresh inventory is required. Wouldn't the original inventory be used while checking out the previous tenant? Any wear and tear would be noted and any damage outwith should be put right by the tenant or at their expense?

I'm happy to pay administrative fees that aren't covered in the management package, credit checks or updating the inventory for example, but believe these should be made clear and reflect what was carried out. I've also asked for a breakdown of what is actually covered in the management package as this doesn't seem to be detailed anywhere in writing.

Any advice on typical fees appreciated.

G_M

You need a new inventory each time.

The new tenant cannot sign the previous one. The condition of the items will have changed, and both T and agent will need o check before signing - all of which takes admin time.

as for the fees - what does your contract with the agent say? That's what you agreed when you signed!



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LEJC

your charges are in line with what I pay to a letting agent.
half the first months rent for a tenant only find.
on top there are fees for inventory and paperwork such as deposit protection,but some of this I do myself.


It is quite standard to be charged when a new tenant is found.

blued

G_M wrote: »

You need a new inventory each time.

The new tenant cannot sign the previous one. The condition of the items will have changed, and both T and agent will need o check before signing - all of which takes admin time.

I'm not suggesting they use the actual same inventory but when the check out is done any changes that are wear and tear should be noted. Then the existing inventory can be updated and printed off for the new tenant. Doing it any other way would be extremely inefficient unless I'm missing something?

G_M wrote: »

as for the fees - what does your contract with the agent say? That's what you agreed when you signed!

Like I said in my original post, the contract is vague, it doesn't have anything specific about subsequent tenancy charges.

blued

LEJC wrote: »

your charges are in line with what I pay to a letting agent.
half the first months rent for a tenant only find.
on top there are fees for inventory and paperwork such as deposit protection,but some of this I do myself.


It is quite standard to be charged when a new tenant is found.

I pay for a full management option, not tenant find only, so pay a monthly percentage to the agent from the rent. This covers rent collection, periodic inspection and arranging maintenance if required. I'm not sure what else is covered so have asked for clarification.

LEJC

blued wrote: »

I pay for a full management option, not tenant find only, so pay a monthly percentage to the agent from the rent. This covers rent collection, periodic inspection and arranging maintenance if required. I'm not sure what else is covered so have asked for clarification.

Still quite standard to have to pay for a new tenant to be found...
I was on fully managed but it worked out a better deal to swap to tenant only find.


I suspect that you pay quite a high percentage for fully managed as perhaps you are not in the position to to take over certain aspects of your rental,and as such I guess the agent wants to keep you with them which may be why they may be prepared to "refund" the tenant find element that you have been charged this time...in their eyes its better they keep your buisness rather than you searching for a better deal eleswhere.


As a general rule you would and should expect to pay some additional costs if your tenants change....some letting agents will also charge if your tenants renew a contract...not all agents are the same or indeed offer the same service so it is advisable to read your agreement with them and shop around for the agent that will give you the best deal if you are able to.

blued

LEJC wrote: »

Still quite standard to have to pay for a new tenant to be found...
I was on fully managed but it worked out a better deal to swap to tenant only find.


I suspect that you pay quite a high percentage for fully managed as perhaps you are not in the position to to take over certain aspects of your rental,and as such I guess the agent wants to keep you with them which may be why they may be prepared to "refund" the tenant find element that you have been charged this time...in their eyes its better they keep your buisness rather than you searching for a better deal eleswhere.


As a general rule you would and should expect to pay some additional costs if your tenants change....some letting agents will also charge if your tenants renew a contract...not all agents are the same or indeed offer the same service so it is advisable to read your agreement with them and shop around for the agent that will give you the best deal if you are able to.

Thanks for the info, if it's standard that's fair enough. He may have said to me at the time there was no charge (to win my business) and forgotten, as I was shopping around at the time. The monthly fee is lower than a competitor we used when we were travelling a few years ago but their communication was much better. If I have clarity of what fees are for and they are fair then there's no problem, in this case I knew nothing about them until I queried the low payment.

I've since had details of the full management package sent -

• Tenancy pack before lease begins (new legislation)
• Completed short term assured lease
• Issue of AT5
• Inventory written/video/picture
• Lodging security deposit with Deposits Scotland
• Credit check/references including affordability study
• Property inspection

LEJC

blued wrote: »

Hi all,

I'm currently renting my house out while working overseas.

Any advice on typical fees appreciated.

Fees vary and its perfectly acceptable to try and strike a deal.
Typically tenant only finder fee is half first months rent and I've not really been able to get that at a lower cost.


Fully managed is a whole different senario and as such the fees vary substantially..
I was originally quoted figures up to 20% but finally accepted 8% after doing research and speaking to other letting agents...some LL can get fully managed at around 6% but I have yet to see a figure lower than that...


Hopefully you pay somewhere inbetween those figures...20% and you should be shopping somewhere else around 10% if you just have the one property would be a more reasonable deal IMO

blued

LEJC wrote: »

Fees vary and its perfectly acceptable to try and strike a deal.
Typically tenant only finder fee is half first months rent and I've not really been able to get that at a lower cost.


Fully managed is a whole different senario and as such the fees vary substantially..
I was originally quoted figures up to 20% but finally accepted 8% after doing research and speaking to other letting agents...some LL can get fully managed at around 6% but I have yet to see a figure lower than that...


Hopefully you pay somewhere inbetween those figures...20% and you should be shopping somewhere else around 10% if you just have the one property would be a more reasonable deal IMO

Thanks again, great info.

I pay 9% for the management fee (one property). I don't think anyone in my area would go as low as 6%, they wouldn't make much money at the average rental prices. I did some digging in my emails and found that the free subsequent tenant thing was with another agent. However I also found an email with all the details originally agreed with my agent. It is just a £100 fee for subsequent tenants so we've agreed I'll be getting a credit.