Check out fee at start of tenancy

myoung48

Hello,

My family and I are in the final stages of renting a new property. We are moving from one rental property to another within England. We are using the same letting agent that we did when we rented our current property (9 months ago).

They are charging us all the same letting fees as they did last time, which is tough to take, but we don't have any choice but to move now and although it was announced that letting fees would be banned in the Autumn statement last year, it's not the law yet, so there's nothing we can do.

Having resigned ourselves to this, we were shocked to see on our final invoice that we are being asked (told) to pay a "check out fee" when we move in to the new property. I checked our previous invoice from the same letting agent 9 months ago and we did not pay the check out fee in advance last time. So in the intervening 9 months they have changed there policy to make the check out fee payable at the start of the tenancy. I think you can probably guess why! :mad:

We have already signed a "next step" guide and paid our reference fees, so I'm guessing there's very little we can do now. It does say in the guide we signed that the check out fee was payable in advance, so I guess it's our fault for not reading every word of the thing in detail.

Nonetheless, it still seems criminal that we have to pay a fee for a "service" that will only be provided (we hope) many years from now. I could even construct a potential scenario where we purchased the house from the landlord while renting it and the check out service would never be needed at all.

Other than ranting about how well deserved real estate agent's reputations are, I guess the point of this post is to ask if there's anything we can do? Even if letting fees are still legal, surely it's not legal to charge someone for a service that (at least in theory) they may never need to actually provide. Do we have any recourse here or do we just have to accept it and move on?

Guest101

It's perfectly legal.


And if you bought the house from your landlord, you would become the new de facto landlord and at that point be able to reclaim the fee.

MyOnlyPost

The major problem you will have here is that what the agent has done probably isn't illegal and this is therefore contractual law which can only be enforced by yourself through the courts. The term is unfair (and immoral) and in all likelyhood a court would agree but if the agent refuses to back down over this it may involve going to court to resolve it.

I hope someone else can offer more advice that helps but as far as I am aware tere is no ombudsman to appeal to for things like this

Guest101

MyOnlyPost wrote: »

The major problem you will have here is that what the agent has done probably isn't illegal and this is therefore contractual law which can only be enforced by yourself through the courts. The term is unfair (and immoral) and in all likelyhood a court would agree but if the agent refuses to back down over this it may involve going to court to resolve it.

I hope someone else can offer more advice that helps but as far as I am aware tere is no ombudsman to appeal to for things like this

1: there is an ombudsman, as all agents must be registered with one of a number of authorised schemes
2: this is a perfectly fair term.

myoung48

Guest101 wrote: »

1: there is an ombudsman, as all agents must be registered with one of a number of authorised schemes
2: this is a perfectly fair term.

You may think it fair. I do not. Thankfully enough people share my opinion that letting fees has become a big enough political issue that they will soon be banned.

Let me ask another question instead. If/when letting fees are banned, do we have grounds to recover the check out fee we will have already paid as it was charged for a service that will be provided at a point in time when charging for such services is banned?

Miss_Samantha

myoung48 wrote: »

You may think it fair. I do not.

And you will find that a court will agree that this is fair.

You also do not have to accept and can look for another property with another agent/landlord.

MyOnlyPost

Guest101 wrote: »

2: this is a perfectly fair term.

You are a respected poster, I am sure you are right, but I don't understand. I am struggling to think of any other comparable situation where you could be made to pay up front for a service which you may not benefit from for several years or indeed ever. This is compounded by the fact that the agent is charging the tenant now for a future service because they know that they won't be able to charge the tenant for it when it actually occurs. I would genuinely appreciate insight in to what makes it fair?

Guest101

Thanks.

There's a good chance that fees won't be banned fully, just the profit element. We won't know until the white paper comes out.

The LL typically pays for one and tenant for the other - which makes it fair

MyOnlyPost

myoung48 wrote: »

You may think it fair. I do not.

Not being pedantic, I genuinely don't know your background. When used to discuss contracts the term fair is different to everyday use. I genuinely thought it it to be an unfair term and others don't, I am open to persuasion because to be unfair it has to give the agent a right without reciprocity which having given this more thought, this may not. I think it unfair by the everyday use of the word still.

myoung48 wrote: »

Thankfully enough people share my opinion that letting fees has become a big enough political issue that they will soon be banned.

You lose my support there. I can forgive any member of the public not fully understanding free market economics but think it shocking that a Conservative governement don't. When these fees are "banned" they're not actually banned just cannot be charged to tenants, who do you think the agent will charge? When the landlord is faced with extra fees that until now the tenant has been paying do you expect him to absorb them?

The landlord will increase his rent to cover these fees but the agent takes 10% of his rent + VAT as a fee. In order to cover £800 of up front fees the rent goes up £910 over a 12 month term, of that £910 the landlord receives £800 to cover the fees he was charged and so after one year is no better off than the current arrangement. The agent still has his £800 fees and an extra £91+ VAT. The tenant pays £110 more in year one than previously and £910 more each subsequent year he stays. Whichever way you cut it when costs go up it is always the end user who foots the bill.

mimiduck

I work in an estate agency. Check out fee is basically something you would pay when you are moving out of a property and there was an inventory made of this property. The way things usually would be charged is that landlord pays for check in and tenant pays for check out. This is quite common and as landlord pays one charge it is fair for the tenant to pay the same charge when leaving.

Most likely why you were not charged for a check out fee earlier is because the landlord for the previous property never requested an inventory to be done.

One thing which is strange is that the agency is charging the check out fee at the start of the tenancy. I have not heard of this before however if their terms and conditions say this then this is fair.

MyOnlyPost

myoung48 wrote: »

we were shocked to see on our final invoice that we are being asked (told) to pay a "check out fee" when we move in to the new property. I checked our previous invoice from the same letting agent 9 months ago and we did not pay the check out fee in advance last time.

mimiduck wrote: »

Most likely why you were not charged for a check out fee earlier is because the landlord for the previous property never requested an inventory to be done.

The OP doesn't say they didn't pay a checkout fee on the last tenancy, they are saying they didn't pay it at the beginning of the tenancy