Extortionate fee for landlord to re-register deposit

amusingemu

Hi everyone, hoping someone can give me advice on some queries re estate agent fees. I'm a landlord and have been letting a property for the last few years.This is the first time doing letting so I am picking up things as I go along, including the feeling of being a mug for being charged so much for ridiculous things.

I'm coming towards the end of a tenancy and in my latest statement the agency has charged a "Deposit admin fee" of £45+VAT (£54 total), which is for re-registering the deposit with the Tenancy Deposit Scheme. This fee and amount is in the T&Cs that I agreed to at the start of the tenancy so I accept that I agreed to pay it. However, now that it's actually being taken it seems extortionate, particularly when the maximum fee the TDS actually charges agents is £13. Another LL on here also had a problem with such high fees, though I don't know how/if they decided to resolve it (I can't post the link to his thread).

So my question: is there any basis for being able to charge such an extortionate deposit re-registering fee / has anyone successfully challenged an agency for such a high fee for re-registering a deposit? As I said, I agreed to it in the T&Cs, but it's doesn't seem right that agencies can charge (at all, let alone £54) for complying with legal requirements, or that there isn't any level of regulation of these fees by e.g. The Property Ombudsman.

Thanks in advance.

jonnydeppiwish!

Why do they need to deregulated the deposit? Has the tenant agreed to a new fixed contract? Can you not just let them go on a monthly contract instead, therefore avoiding any new charges?

macman

As above, why not just go periodic, unless the tenant is insisting on a new contractual term?
PS; tenancies don't 'come to an end': they just roll over to periodic if not renewed on a fixed term. Only the tenant or a court can end a tenancy.
LA's will always push you to offer new contractual tenancies so that they can rip you off with these kind of inflated charges.
You are of course at liberty to renegotiate the agency contract, especially if it is near to the end of it's term.

Countrysider

amusingemu said:

So my question: is there any basis for being able to charge such an extortionate deposit re-registering fee / has anyone successfully challenged an agency for such a high fee for re-registering a deposit? As I said, I agreed to it in the T&Cs, but it's doesn't seem right that agencies can charge (at all, let alone £54) for complying with legal requirements, or that there isn't any level of regulation of these fees by e.g. The Property Ombudsman.

Tenants were charged unregulated 'renewal fees' for years that were much higher that 54 quid and, in most cases, had to pay or have the threat of a S21 hang over their head with no option to switch their agent. 

Now tenant fees are banned EAs are pushing costs on to landlords. As they should, because the landlord is the client and is free to shop around for a competitive EA. You'll have to suck up the fee or switch agents, but i suspect all will charge some fee for renewal and there's not much saving from a yearly cost of £54. 

Property Ombudsman will side with the EA as the fee was in the contract you signed. 

Jonboy_1984

How much work is involved for the process?

Minimum wage is £9.50 per hour, which would likely work out closer to £12 once employers NI, pension and holiday pay are added on. Expect to pay more for a reasonable administrator.

Allow 100% markup to cover the other overheads involved (office, rent, infrastructure) and the £13 they are paying over to the deposit scheme and it wouldn’t seem unreasonable to me if it was an hours work to prepare, check and file.

theartfullodger

Why let agent register deposit, probably get it wrong, charge you for it, you find s21 invalid & you liable for penalty??

Either instruct them to return deposit to tenant to get it from them & register it yourself. 

macman

Probably because the OP has signed a contract with the LA which reserves these functions exclusively to the agent?
OP needs to come back and tell us why/if a new fixed term really needs to be offered.

amusingemu

Hi everyone, thank you very much for your responses. I was expecting an email notification for responses and didn't get any so didn't check back, and have also moved house and not had a chance to get back to you.

I know it was in the terms that I agreed to, I was interested in your views re if agencies are allowed to charge fees for complying with legal requirements, i.e. for doing their job, because it's just another way for them to rinse me. I'm quite young, and learning the hard way that landlords have replaced tenants as agencies' cash cows. I was unaware of rolling monthly tenancies rather than fixed renewals, I'll look into that option when the current tenancy comes to an end. I'll also consider doing the deposit myself next time and put it into a free scheme.

Thanks again

steampowered

This actually sounds like a reasonable fee to me.

The agent is only getting paid £32. The rest is the TDS fee and VAT.

£32 isn't a lot to pay for a member of staff to monitor the deposit payable and register it. At least its not to me, maybe I'm used to things being more expensive as I live in London.

propertyrental

amusingemu said:

Hi everyone, thank you very much for your responses. I was expecting an email notification for responses and didn't get any so didn't check back, and have also moved house and not had a chance to get back to you.

I know it was in the terms that I agreed to, I was interested in your views re if agencies are allowed to charge fees for complying with legal requirements, i.e. for doing their job, because it's just another way for them to rinse me. I'm quite young, and learning the hard way that landlords have replaced tenants as agencies' cash cows. I was unaware of rolling monthly tenancies rather than fixed renewals, I'll look into that option when the current tenancy comes to an end. I'll also consider doing the deposit myself next time and put it into a free scheme.

Thanks again

I'd recommend spending some time (and maybe even money!) becoming more familiar with tenancy law, landlords' duties and obligations, and the practicalities of letting properties.

There are books on the topic eg

https://www.waterstones.com/book/letting-property/roger-sproston/9781847164643

Join the https://www.nrla.org.uk/  all sorts of discounts and benefits, advice, and even training courses. Tax deductible.

Or start here:

Post 2: Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015) plus the Homes (Fitness for Human Habitation) Act 2018

Post 3: Deposits: Payment, Protection and Return.

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

Post 5: Rent increases: when & how can rent be increased?

Post 6: Repossession: what if a LL's mortgage lender repossesses the property?

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

Post 9: Letting agents: how should a landlord select or sack?

_Penny_Dreadful

amusingemu said:

Hi everyone, thank you very much for your responses. I was expecting an email notification for responses and didn't get any so didn't check back, and have also moved house and not had a chance to get back to you.

I know it was in the terms that I agreed to, I was interested in your views re if agencies are allowed to charge fees for complying with legal requirements, i.e. for doing their job, because it's just another way for them to rinse me. I'm quite young, and learning the hard way that landlords have replaced tenants as agencies' cash cows. I was unaware of rolling monthly tenancies rather than fixed renewals, I'll look into that option when the current tenancy comes to an end. I'll also consider doing the deposit myself next time and put it into a free scheme.

Thanks again

That is why there is a fee...you outsourced the tasks required to meet your obligations as a landlord and you are paying the agreed fee for that service. I am no fan of letting agents but I can't see the letting agent is in the wrong this time. 

It's hardly surprising the letting agent is easily able to extract money from you given that you don't seem to know much about being a landlord.  You are old enough to be a landlord therefore you are old enough to do your homework to learn what being a landlord entails.  If you choose to remain ignorant then there will always be a letting agent or a canny tenant around to relieve you of money.