Cooling off period for rental reservation fee

sh856531

Hi all

We are looking to rent a property and the estate agent has asked for an immediate £400 reservation fee to take the property off the market. They have taken the payment over the phone and this is well in advance of the tenancy being agreed.

Can anyone advise on whether this fee is subject to a cooling off period under distance selling act? The payment was taken over the phone and we have never met the estate agent in person.

Just to be clear, this is more out of curiosity than their being an issue

Thanks in advance

S

Pixie5740

Have you even viewed the property yet? If you have seen the property then just because a payment was taken over the phone I don't think that it is classified as distance selling.

From Shelter's website:

All letting agencies must disclose upfront any fees they charge on top of the rent or tenancy deposit. From 27 May 2015, letting agents must publish full details of their fees and charges on their websites and prominently in all their offices.

Letting agents must publish a full list of their fees. The list must clearly show if a fee covers the whole property or if it must be paid by each tenant. The description of each fee must be clear so you can understand the service or costs covered.

The published amount must include any taxes such as VAT. If the amount of a fee isn't known in advance, the agent's list must say how the fee is calculated.

So what does the letting agency's website say about the reservation fee?

Of course if you are in Scotland letting fees are unlawful and you shouldn't have been charged £400 at all.

G_M

What were you told when you paid the fee?

It seems common sense though that the purpose of this was for the landlord to hold the property for you. By taking it off the market he is removing the possibiliy of letting to anyone else, so if you change your mind, he has lost money (he'll have to re-advertise, and there will be a longer delay before the next tenancy starts).

So the purpose of the fee is likely to be to compensate for this.

However, as pixie says, it all depends what you were told.

sh856531

Hey

Thanks for the reply:

G_M wrote: »

What were you told when you paid the fee?

I'm not convinced that whether distance selling regulations apply is contingent on what I was told during a phone call with someone I haven't met. I could be totally wrong about that though!

G_M wrote: »

It seems common sense though that the purpose of this was for the landlord to hold the property for you. By taking it off the market he is removing the possibiliy of letting to anyone else...

Just to be clear - this is a "processing fee" paid exclusively to the estate agent. The landlord doesn't see a penny of it, though I take the point that it does reduce the risk to the landlord.

My actual issue is that theoretically although I've paid the fee, the *landlord* could withdraw because we haven't signed a tenancy agreement. In this case because it was a "processing" fee paid to the estate agent, I'm not clear on whether I would have any recourse for a refund other than the distance selling regulations.

For the avoidance of doubt the estate agent said it was a "processing" fee - *not* a reservation fee and that in all cases it was *not* refundable. That all seems a bit dubious to me and will remain so until I have a signed tenancy agreement in my hands

Thanks

S

Innys1

Sounds like OP is paying £400 for nothing.

OP - in future try and minimise the cost you have to pay any agent.

There are landlords out there who will advertise on places like Rightmove but through online agents who don't charge either party anything like what High St parasites, I mean agents do.

agrinnall

I have to assume you are in an area where rental properties are in big demand, otherwise paying any such fee would have been throwing money away. If you are in such an area then perhaps this is just a cost of obtaining a property in a sellers' market, and you just have to hope for the best when you actually view the property.

What you might want to clarify is if it is refundable if for some reason they decide not to let to you (rather then you simply deciding you don't like the place).

HappyMJ

Have you really paid £400 to someone you've never met over the phone for something you haven't even seen the inside of yet?

sh856531

HappyMJ wrote: »

Have you really paid £400 to someone you've never met over the phone for something you haven't even seen the inside of yet?

I have seen inside the property - but the processing fee was paid over the phone to the letting agent. The letting agent is one of the largest in our local area and ive no reason to believe they are anything other than reputable.

As i say - i'm just curious as to whether distance selling regulations apply to this sort of payment made over the phone to process an application

Cheers

S

Kynthia

Distance selling regulations apply to items you buy without seeing, so you have a chance to return them once you receive them. I doubt it would apply to property or associated fees as you are expected to view in person.

Guest101

Kynthia wrote: »

Distance selling regulations apply to items you buy without seeing, so you have a chance to return them once you receive them. I doubt it would apply to property or associated fees as you are expected to view in person.

Distance selling applies to much more than that, including contracts.

booksurr

sh856531 wrote: »

I'm not convinced that whether distance selling regulations apply

they don't seeing as they were abolished in 2013

sh856531 wrote: »

Just to be clear - this is a "processing fee" paid exclusively to the estate agent. The landlord doesn't see a penny of it, though I take the point that it does reduce the risk to the landlord.

My actual issue is that theoretically although I've paid the fee, the *landlord* could withdraw because we haven't signed a tenancy agreement. In this case because it was a "processing" fee paid to the estate agent, I'm not clear on whether I would have any recourse for a refund other than the distance selling regulations.

For the avoidance of doubt the estate agent said it was a "processing" fee - *not* a reservation fee and that in all cases it was *not* refundable. That all seems a bit dubious to me and will remain so until I have a signed tenancy agreement in my hands

so you have agreed to and received a service contract from the estate agent. It is not contingent upon you taking the property nor it is contingent on the LL completing on any tenancy agreement based upon what you say above and obviously without having actually read what it says

as such you are entitled, under the Consumer Contracts Regulations 2014, to cancel within 14 days of receipt of the service but would have to pay for whatever proportion of the service you had actually consumed up to the date of cancellation. That could be an interesting test case as it would appear to be either £0 or £400 since I think the EA would struggle to show how much processing he had done and so how much service you had received!