So lettings fees, what
are they all about?
Like it or
loath it, chances are if you are looking to rent a property through a lettings
agent you’re going to face what can only be described as a ‘letting fee’. This
rather non-descript term is used to explain the fee that is charged by agents
to potential tenants for administrative and vetting purposes before you even
move into your new rental property.
The
justification of these charges is to subsidise (if not completely cover) the
agent’s administrative costs that are borne by preparing all the paperwork and
documentation that is required to secure a let. Typically, these fees are pretty
universal and likely to set you back somewhere between £200 and £300.
But what are the fees for?
Generally, the
fee would be used to cover the cost of:
1. The administrative of preparing tenancy
documentation
2. Credit reference checks
3. References from banks, employers and/ or
previous landlords
A good agent
should always make a prospective tenant very clear of these costs before any
agreement is signed. Clearly this is not always the case, so it is always
sensible for a tenant to ask for the following:
1. A full list of fees (if the agent does
indeed charge)
2. Details of the services that this
includes
3. If the agent is affiliated to any Trade
Bodies, and if so, which?
Since November
2013, all Lettings Agents in England must disclose upfront any fees they charge
on top of the rent and deposit in their adverts and lettings. (Please note,
property portals like Zoopla and Rightmove are exempt from these requirements)
Further costs
But that’s not
all. As a tenant, you will also more than likely be expected, quite
legitimately to pay for:
1. A holding deposit to secure a property
2. An Inventory Report
3. A Renewal fee for renewing the tenancy
agreement when the fixed term ends.
A holding
deposit should only be made when a prospective tenant has decided 100% to take
a property, and wishes to secure it whilst the administration process is taking
place. The holding deposit guarantees that the tenant will take the tenancy and
should always be supported with written confirmation from the agent. The
confirmation should include details of the amount that is paid, as well as
documenting how the monies will be returned once the tenancy begins (if indeed
the funds are due to be returned- sometimes they can be put towards the
deposit). Please be aware, that if you choose not to move into the property,
this fee may not be refunded.
The Inventory
Report is a detailed record of the condition of the property prior to the
tenant moving in, and is used as a basis to assess any damages at the end of
the tenancy. With the introduction of the Tenancy Deposit Scheme, these reports
have become more and more prevalent and it is common practise to charge the
tenant for either the Inventory Report (carried out at the beginning of a
tenancy) or the Check Out Report (at the end of the tenancy).
Finally, one
should also be aware that the tenant might also be charged a renewal fee once
the fixed term of their tenancy agreement ends. This is always worth checking
prior to signing anything.
What A Tenant CANNOT be charged
It is a
criminal offence for any agent to charge for the following:
1. To register with the agent
2. To show a list of available properties
Golden Rules
1. Read everything.
2. Don’t be afraid to ask questions-
remember the agent needs you as much as you need them!
3. Negotiate the lettings fees. If a
property has been on the market for a while for example, there is no harm in asking
the agent to cut their fees.
Complaints
Please visit
the following sites for further information regarding making a complaint
against an agent:
Complaints
regarding the transparency of fees.
·
Trading
Standards. Find your local office (https://www.gov.uk/find-local-trading-standards-office).
Complaints
regarding any potential criminal activity by the agent.
Complaints
regarding any wrongdoing by the agent.
