In this article:
- The Law about letting agents’ fees
- What sort of reasonable fees to expect from a letting agent
- What you can do to avoid unfair fees
- How to complain about unfair fees
If you are looking at renting a flat or house but wonder why the monthly fees seem to be higher with Letting Agents, it is because agents make most of their money from the landlord, not the tenant. They do this by taking a percentage of the rent.
This means agents tend to be more loyal to the landlord than the tenant. The landlord and his property are a long-term source of income while tenants come and go.
In places where there is a housing shortage, such as London, the landlord-letting agent loyalty means you can get some unscrupulous firms operating who make a fortune charging extortionate rents. They get away with it because they know that if tenants get annoyed and leave, they can be replaced easily within a day or two.
That’s why TTV recommends being careful when you start making your search for rented accommodation. It is always worth taking your time and investigating Letting Agents as thoroughly as you can.
TTV Approved letting agents follow a strict code of conduct and operate within the law, so rent through them wherever possible. Look for TTV sticker which is your symbol of trust. To be absolutely sure you are advised to make your own checks as far as possible.
The law was simplified in 2008 by the Consumer Protection from Unfair Trading Regulations (2008). This replaced lots of other laws. It was supposed to introduce “a general duty not to trade unfairly and seek to ensure that traders act honestly and fairly towards their customers.”
What the law means in practice
The Consumer Protection from Unfair Trading Regulations (2008) made little difference to Letting Agents. Good and bad letting agents continued as before.
In 2013 the Advertising Standards Authority (ASA) criticised letting agents and told them to display compulsory fees and charges. The ASA came to the conclusion that unscrupulous agencies were getting away with it by hiding their charges. Unfortunately the ASA has no influence outside the world of advertising.
What constitutes reasonable letting agents fees is a matter of opinion. However, TTV believes, as do most people in the lettings industry, that most tenants should not pay more than the following:-
- Inventory fee in a furnished tenancy: £50-100
- Tenancy reference: £30
- Deposit of 4-6 weeks rent
- Agreement fee: £30
- Tenancy renewal fee: £25
- Administration fee: £100
Here are just a few examples of the many ways bad Letting Agents make extra money from tenants. With very unscrupulous letting agents, some of these charges might be made to the landlord, for the same tiny job.
- A penalty payment if you don’t pay the rent by standing order
- A reservation fee to hold a property while you get a reference or deposit
- A moving in charge
- A moving out charge
- Cleaning charges when you move out leaving the place spotless
- Unnecessary letters or form letters, such as ones telling you that your rent is going up
- A fee for signing up with the agency
- A fee for a tenancy agreement
- Any admin which is inevitable
How to avoid unfair fees
TTV highly recommends all tenants who want to avoid paying unfair fees should do one thing – and that is don’t sign the tenancy agreement until you have read it. Once you have signed, the letting agency can legally charge you whatever fees are payable within its policy to charge.
The agency fees are likely to be listed far into the agreement and possibly in small print. This wrongly implies they are not important.
They might also be carefully worded to look vague. This can give the agent a free rein to charge for any admin task or letter once the contract is up and running.
Fair treatment from a letting agency
An honest letting agent will advertise all fees on their website and will be up front about what you are expected to pay for. They will also be quick to give you a receipt.
The biggest difference between good and bad letting agents is that the good ones give you time to read the tenancy agreement, they are happy to listen to and answer your questions about charges.
You will probably find bad letting agents start chatting to you while you are trying to read the tenancy agreement to hurry you along in case you spot something suspicious. They might even turn the heat up reminding you that the property is in demand so you need to sign quickly.
How to complain about unfair fees
Even though you have signed for the charges, under the Consumer Protection from Unfair Trading Regulations (2008) you do have the right to challenge unfair fees.
- Write, email and phone the agency, even if it’s to complain about a small charge
- Contact your landlord who might be sympathetic
- Tell the agency you will report them to the association of which they are a member (see Finding a Good Letting Agent) and do so
- Complain to the Property Ombudsman Service which is free as they can have the charges stopped
- If the charge is an obvious rip-off refuse to pay and see if the agency is prepared to insist. Eviction can be a long, costly process for agents and the courts do not look favourably upon extortionate charges
“Like tenants, we’ve seen every trick in the book, including being charged for something which the tenant was also charged for. I know one agency which was – and maybe still is – charging both the tenant and the landlord twenty quid each for a photocopied lease which is worth about four pence.”
“But I have heard of letting agents that go through all the costs with tenants and landlords and are perfectly reasonable. With those agents it’s us, the landlords picking up most of the tab.”
“I’m not sure that letting agents should be charging tenants anything except very few and unavoidable admin jobs, unless they are late with the rent. Fees for signing and form letters are just theft. “
– Stewart Campbell, Borders Landlord
- The sure way to avoid unfair charges from letting agents is to avoid letting agents who charge them. Always read the tenancy agreement and ask questions before you sign.
- Even if you have signed up to unreasonable charges you can still challenge them. In extreme cases, you can refuse to pay them but talk to the Ombudsman first.