Renting and Lettings Agent charges

enricobanana

I have just been told by a letting agent that I have to pay them £470 in admin fees to become a tenant. The Landlord is being charged over £1000 for many of the same things I am being asked to pay for. I found this link: http://www.guardian.co.uk/money/2004/may/15/renting.jobsandmoney
that gave me some help. I challenged the agent and offered a maximum of £100, and they put me on to the branch manager who started shouting at me! I've told them that they now must give me a full written breakdown of their costs with evidence before I will discuss it further, and threatened to pull out of the deal. Where do I stand if I arrange everything directly with the landlord? Would the agent have legal grounds even though their charges are extortionate? Could the Landlord cut them out due to the fact that their poor service (shouting at the customer) has jeopordised the deal?
Has anyone else out there had to pay extortionate charges to lettings agents?
E:eek:

Fred1_2

This is one of the reasons that I decided not to use an agent to rent out my house. They rip off both landlord and tenant (OK, I'm sure there are some honest ones out there, in fact I think I've met one - just the one).

My advice is walk away from this agent. If you can, contact the landlord directly, if (s)he doesn't have a sole agency agreement with the LA, you should be able to cut a deal. If that doesn;t work, use the small ads in the local paper, not an agent, you'll save a bomb and start a direct relationship with your landlord, which can be invaluable if you need things doing in future.

tbs624

You can try talking direct to the LL but he may still have to pay a fee to the Agents as they have effectively "introduced" you as a potential tenant. As Fred1 says, I'df be tempted walk away from any LA who demonstrates such contempt towards tenants - they sound thoroughly unprofessional. If the LA is a member of ARLA or is signed up to the OEA scheme, put in a formal complaint to the relevant body. The main problem is that there is so little regulation of untrained, unqualified, and inexperienced LAs - your best bet may be to look around for a LL who manages his own properties.This lot will probably try to sting you and the LL again when the contract is up for renewal.

Oh and maybe you'd consider signing up to this one, especially whilst the govt is currently reviewing the private rentals sector:

Originally Posted by xiox
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

---

enricobanana

Thanks for your responses, and for the link to the petition. I drafted a response back to the agent's demand for fees, with links to all of the relevant information on the net, and stated my position as considering the charges to be unlawful. They have basically refused to acknowledge my complaint and refuse to consider my application until I pay them for doing so. Their justification is that they are part of the Sequence group and so can do what they like.
The email communication between us makes entertaining reading, I'll post a copy of it once I've removed the contact info out of it. Perhaps someone else can make use of the arguments and get some success in future.
The landlord has 2 agents trying to recruit for this property, so I'm going to the other one (who I actually contacted first) to offer them the chance to deal with this tenancy, and if they don't play ball, we're going to set it up directly between us.

tbs624

enricobanana wrote: »

....
The email communication between us makes entertaining reading, I'll post a copy of it once I've removed the contact info out of it. Perhaps someone else can make use of the arguments and get some success in future....
.

Excellent - I look forward to reading that one;)

enricobanana

[First written communication from agent to me]

Dear Mr.

Thank you for the application to let the xxx house. xxx has discussed with me your concern with the application charges and I have reviewed these for you slightly.



It is a legal requirement that every applicant over the age of 18 must be referenced as they must go on the Tenancy Agreement.



For you and your wife the Reference and Admin fee will be £235.00.

For your Parents we can charge £117.50 which is quite a discount.

This gives you a total of £352.50. This can be paid by Debit Card or Cheque



Other charges that you will incur will be;



First months rent on the day of move in £ xxx

Deposit (Full) £xxx (This goes into a Tenancy Deposit Scheme, which will be returned in full unless there is damage to the property) This deposit money can only be released to you from your Land Lady at the end of the Tenancy.

Check in Charge with Inventory Clerk £ 74.00 Inclusive of VAT (This is done by a Third Party Company)



This gives you a total of £ xxx (This can be paid by Bankers Draft or Debit Card)

If there is any other way I can be of service to you please let me know.

Kind regards

xxx

[My reply]

Dear xxx
This is unacceptable. As discussed with xxx, I was prepared to pay £100 towards admin fees and not a penny more. While I still believe £100 to be extortion, it does appear that this is more in common with the underhand practices that the rest of the estate agency industry is charging. Please see this link for where I have got this information from: http://www.guardian.co.uk/money/2004/may/15/renting.jobsandmoney

I have also surveyed other agents, and their fees are typically £100 to £150. One professional agency I spoke to in Cheshire does not charge tenants anything as they believe it is underhand, sharp practice, and not in their customer's best interests. See here: http://www.simplyrent.co.uk/

I am very concerned about your claim that it is a 'legal requirement' that every applicant over 18 must be referenced as they must go on the tenancy agreement. Please be aware that if this information is incorrect, you are committing a fraud. So far, the agencies I have spoken to make no similar claims, and the following information I have found makes no mention of this 'legal requirement', see the following links:
http://www.adviceguide.org.uk/index/family_parent/housing/tenancy_agreements.htm
http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/RentingAHome/DG_4001366
http://www.compactlaw.co.uk/tenancy_agreements.html

There is in fact a piece of legislation that could be brought to bear here; The Prevention of Corruption Act 1906 makes it an offence...
"If any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business..."

What this is basically saying is that you are not allowed to charge anyone for being put forward as a tenant to the landlord. In more basic language, what you are asking for is a 'bung'.

Also, what I asked for in writing was not a list of charges you were planning to levy (although it is interesting that this is the first time a 'check in charge' has been mentioned, what more surprises await?), but a breakdown of your costs (with evidence) to justify your charges. £470 is very excessive for typing names into a boilerplate standard document. I believe you will not provide this as you have no means of justifying these charges without admitting that they are disproportionate, excessive and extortionate.

What I would also expect, but I leave it to your choice, is an apology for the manner in which I have been spoken to by xxx. I am staggered that anyone would dare to argue with a customer, let alone shout at them. If any of my sales staff behaved in such a manner they would find themselves facing disciplinary action.

I will wait for a response back from you, until 12 noon tomorrow (Friday 18th April). This should be adequate time for you to review your position and come back to confirm that you will not levy any charges, and to forward to me the documents for signature (which were promised by xxx and have still not arrived). If you do not reply in such a manner by that time, I will withdraw my interest in the property and leave you to explain to your customer why you have lost them a tenant.

Yours Sincerely,

E
[Agents reply to me]



Dear Sir



Thank you for your letter dated the 17th April 2008. As you know xxx is part of the Sequence Group, a National Estate Agency Company and as such conducts its self as a going concern, these fees are market related. It is standard practice across the industry to charge administration and reference costs. The fee I have quoted you is £117.50 per person and £58.75 for the two extra people over the age of 18, this is the middle of the range you have been quoted by the other agents.



The landlord is our client and we act in her best interest, we have a contractual agreement with our client to obtain these references for every adult tenant resident in the property, unless she signs a disclaimer.



If you are unhappy with this we can refer you to ARLA. (Association of Residential Lettings Agents)



With regard the telephonic conversation you had with xxx, it did sound like it perhaps became a bit vocal on both parts and she was quite upset at the end of the call. If you were offended by her knowledgeable forthright manner, I do apologise.



The documents xxx is to send to you will be the forms you need to fill out for the referencing process. These will be forwarded to you once you have settled the Application monies.



Yours sincerely

xxx








It's official ... we're the country's No1 agent for buying, selling, renting & letting


Multi-award winners at the Estate Agency of the Year Awards 2007
Estate Agency of the Year . Best Large Estate Agency . Best Lettings . Best Financial Services

Best Letting Agency Chain 2006 & 2007
Estate Agent and Letting Agent of the Year Awards


P Please consider the environment - do you really need to print this email?
[Final reply to the agent]


Your response does not reflect the requests for information I made, or any willingness on your part to resolve this situation.

Saying these charges are ‘market related’ does not make them acceptable or legal. As for standard practice, if you followed the links you would see that it is not standard practice at all, and there is growing public debate and disquiet about this as sharp practice. My research shows that other agents are either not levying charges at all, or would only consider charging the one person who was responsible for the rent (not adding in a housewife and two retired people), and often withdraw charges when challenged to justify them.

I am justifiably concerned at the conduct of your company and have no wish to enter into any kind of arrangement with you. You have not attempted to allay my concerns, or justify your charges, or respond in a timely manner as requested. I don’t understand how this is acting in the best interests of your client if you cannot respond to simple requests for information from potential tenants.

I have no desire to speak to ARLA, who are a self appointed body from your industry and exist to serve only your interests. This suggestion shows that you have no willingness to act in your client’s interests, but are seeking to protect your own interests. I will, however, require that you register this with your internal complaints procedure; so that a case can be brought with the Ombudsman for Estate Agents should it be necessary in future.

The nature of my complaint is thus: as you refuse to consider my application to become a tenant of your client until I issue you with a reward for doing so, I believe you are committing an offence under The Prevention of Corruption Act.

With regards to the conversation with your lettings agent, I became vocal out of sheer astonishment that I was being talked over and then shouted at by someone who is supposedly working in sales! It is clear that the attitude that you are right and the customer deserves no consideration unless they provide you with a reward first, extends further across your organisation. I wish you the best of luck with that stance in what I expect is going to be a very tough year for your industry.

I will now simply vote with my feet and withdraw my interest in the property.

neverdespairgirl

enricobanana wrote: »

With regard the telephonic conversation you had with xxx, it did sound like it perhaps became a bit vocal on both parts and she was quite upset at the end of the call. If you were offended by her knowledgeable forthright manner, I do apologise.

My emphasis.

I'm astonished. I've never seen such an insincere, rude, "apology" in my entire life.

You are better off without this shower.

jaype

God, what a bunch... stick a note through the door addressed to the landlord detailing all this and see if you can't work something out between you

thepinkladez_2

not believe they are charging you so much in reference fees:eek: . I have worked with 2 referencing agency in my letting agent times and neither have been so high ( these are 2 of the biggest agencies that most agents use). as to the charge to reference your parents ( i assume they are gaurantors?) this usually is no futher cost as it is technically part of the first search so reference agencies do not generally charge. think they are just trying to get as much money as possible.
the other charges are just ridiculous a check in charge? to do what exactly??
i love that such a big company think its acceptable to rip clients off in such a blatent manner and have no justification for their charges, and when challanged seem to not know what is appropriate conduct.
if i was you, if you have l/l's details already, i would try and see if you can deal with them directly, or else go else where. best of luck

clutton_2

i agree that some of these charges do appear high and i will be most interested in the result - pls keep us informed

re credit checking guarantors - as a LL i think it is more important to do full checks on guantors than on tenants - if the tenants needs a guarantor - then there is doubt that the tenant can fulfil their rental obligations - so the guarantor needs to be squeaky clean, AND earn enough to pay their own rent/mortgage AND the rental if the tenant defaults. The only way this can be established is by full checks.

There are 3 different levels of checks a LA/LL can do - and the most expensive is just under £50. If i add on my time in filling in the credit/referencing application forms and phone calls, and web research, then i suppose £100 would not be too far short. But, i charge tenants £50.

Why should the tenant pay that ? Why doesn't the LL pay that ?

good questions

I charge LLs a month 's rent to find them a tenant (depending on local advertisign costs and local rents). The time i take to find a tenant can add up to quite a lot of hours - and i may have to duplicate the whole process for non-shows, failed credit-check applicants, applicants who are time wasters etc etc

I know pretty well everyone on here hates LAs - but if they only get one months rent for tenant finding, plus 10% of the rental for on-going management, they would go out of business. Its just not a high profit business.

the only thing to do is vote with your feet and dont use such agencies

i will be most interested to read how Foxtons get on with OFT ......

noyk

I am currently in the process of being ripped off myself by a LA. Charges are something like

£100 Admin fee
£50 x 2 Reference fee
£130 Check in fee

What a joke is all i can say, I need a house so i'm paying it because i have not a lot of choice. Again this is a large LA chain in the SE. I just hope some super money saver will come up with a way to claim some of this back in the future i will keep my eye out for it!