Highlighting the Problem of Lettings Agencies' "Admin" Fees

tbs624

There seem to be so many posts on here about problems with Letting Agents that I thought it may be worth highlighting a post that got a bit buried in another thread:

xiox wrote: »

Hi - I've become so annoyed by the fees charged by letting agents that I've set up a petition to sign. I expect the government will ignore it, but maybe it will raise awareness of the issue in politics:

http://petitions.pm.gov.uk/lettingfees/

Feel free to send the link to friends

The Government is of course currently looking at all aspects of the private rented sector so if you want to highlight this particular area of L & T transactions, it's probably a good time to sign up to the petition as a start.

On a slightly different perspective to the LA issue, the RLA's current mag also has a small article on working to rid the LL of the LA fees where the LA has provided a tenancy finding service only, but the seeks to re-charge the admin fees LL at tenancy agreement renewal time.

silvercar

On a slightly different perspective to the LA issue, the RLA's current mag also has a small article on working to rid the LL of the LA fees where the LA has provided a tenancy finding service only, but the seeks to re-charge the admin fees LL at tenancy agreement renewal time.

Isn't the OFT investigating this at the moment, with a view to calling it an unfair contract term.

I can see it both ways. On the one hand if a tenant renews there is no work for a letting agent, but if the tenant hadn't renewed the letting agent would have got a fee for finding a replacement tenant. So the letting agents reward for finding a decent long term tenant is no further commission!

chappers

silvercar wrote: »

Isn't the OFT investigating this at the moment, with a view to calling it an unfair contract term.

I can see it both ways. On the one hand if a tenant renews there is no work for a letting agent, but if the tenant hadn't renewed the letting agent would have got a fee for finding a replacement tenant. So the letting agents reward for finding a decent long term tenant is no further commission!

Apart from the ongoing letting fees from the LL.

I do to some degree agree with you, but it's clarity and maybe some legislation thats needed as these fees vary from almost nothing to sky high bordering, on extortional amounts.
There should be some sort of legislation that says LA can only charge a certain percentage of the rent for first time set ups and a certain percentage for renewals, inventories etc and maybe these fees should be split between the LL and the tenant.

silvercar

The OFT has begun a legal case against Foxtons, claiming that the agency's T&Cs are unfair. It has asked the High Court to decide whether the way Foxtons charges landlords commission after a tenancy agreement has ended breached the Unfair Terms and Consumer contract regulations 1999.

chappers

please silvercar tell me more/ point me towards this, is this commission with regards to you letting/selling privately to the same tenants at the end of a tenancy..

Bungarm2001

chappers wrote: »

Apart from the ongoing letting fees from the LL.

I do to some degree agree with you, but it's clarity and maybe some legislation thats needed as these fees vary from almost nothing to sky high bordering, on extortional amounts.
There should be some sort of legislation that says LA can only charge a certain percentage of the rent for first time set ups and a certain percentage for renewals, inventories etc and maybe these fees should be split between the LL and the tenant.

I totally agree with you.

The OFT/Foxtons thing that is going on at the moment is causing a bit of a stir with the last two LA's that I use...suddenly, at renewal time this year they offered to continue with the tenants on a periodic let with no charge (obviously...) whereas last year, for the same tenants, they tried to rip us off a full finders fee of over £500 + VAT each to sign each for another 6 month AST. A 12 month AST would have been almost double apparently ....:eek: )

I am VERY happy that OFT is now finally looking into this. I await their decision with great interest.

silvercar

chappers wrote: »

please silvercar tell me more/ point me towards this, is this commission with regards to you letting/selling privately to the same tenants at the end of a tenancy..

Here is the official press release from the OFT:

http://www.oft.gov.uk/news/press/2008/28-08

google foxtons and OFT for the press articles about it.

clutton_2

""On the one hand if a tenant renews there is no work for a letting agent,"" -

come on now - if a tenant renews of course there is work to be done - a contract has to be drawn up, posted to the tenant, chased up, posted to the LL - this is work that has to be paid for by someone.

i utterly agree that Foxtons need shooting, but, there is a case to be made for moderate LA fees to both LLs and tenants.

Gingernutmeg

clutton wrote: »

""On the one hand if a tenant renews there is no work for a letting agent,"" -

come on now - if a tenant renews of course there is work to be done - a contract has to be drawn up, posted to the tenant, chased up, posted to the LL - this is work that has to be paid for by someone.

i utterly agree that Foxtons need shooting, but, there is a case to be made for moderate LA fees to both LLs and tenants.

I have no objection to a moderate fee, if something's done it generally needs paying for (although in my experience, with my current LA, they do sod all to earn their money anyway and have done nothing but cause hassle). However, I'm in a situation whereby my LA charges £150 per person to renew the tenancy agreement - that's £300 for me and OH. They also 'advise' all their LLs not to offer more than a six month contract, so, unless we go periodic and have even less security than we do now, we're stuck having to pay that every six months, for no real reason other than to line the LAs pockets - I don't want a periodic tenancy as it's insecure enough to be renting. I want to know that, barring repossession/sale, I've definitely got X months in my 'home' ... Personally I don't see the benefit to the LL in this situation, since it's annoying us to the point where we're considering moving out in six months because we were lied to about being given a longer contract this time. Can't really see how good tenants moving out benefits the LL, but I suppose it means more fees for the LA each time ... Which is surely another argument for capping these fees generally, since it's not in the LAs interests to retain good tenants or give people long term tenancies (bad for tenants and LLs), as the LA gets more money for new people, and less for retaining the old.

silvercar

clutton wrote: »

""On the one hand if a tenant renews there is no work for a letting agent,"" -

come on now - if a tenant renews of course there is work to be done - a contract has to be drawn up, posted to the tenant, chased up, posted to the LL - this is work that has to be paid for by someone.

i utterly agree that Foxtons need shooting, but, there is a case to be made for moderate LA fees to both LLs and tenants.

I did all the work when my tenant renewed, all the letting agent did was send me a bill!

clutton_2

""my LA charges £150 per person to renew the tenancy agreement"" - outrageous

why not just write to the LL and explain why you will be leaving and if you were a allowed a 12 months contract at £50 each you would stay .....

he might rather sack the agent and keep you - but it would, of course, also depend on the terms and conditions of the contract the LL has with the LA.

a huge south welsh agency wanted to charge 1% of the purchase price if the tenant they found subsequently went on to buy the property !!!!!! i just laughed and said if i have to sign that - i aint signing.

Many tenant friends and letting agent friends tell me that i am unusual in wanting to know how much fees tenants pay to agents - if more tenants checked out T&Cs ahead of signing up and /or refused or negotiated these draconian clauses agencies would soon reduce them.

lets hope Foxtons gets taken to the cleaners.

i charge £50 for initial referencing/credit check admin fee and never charge the tenant anything further.