I instructed a letting agent on a ‘finder’s fee’ only, my tenant has been there for six months, my agent now wants a fee to just do the renewal paperwork, do I have to pay?
publication date: Sep 16, 2009
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
The issue with letting agents is that they are not regulated at all and as a result they can charge whatever fees they like, as long as they are in the terms and conditions of business that you sign.
With the recent Foxtons' case, charges such as renewal fees have come into question, not because they are doing anything wrong by charging them, but because, in Foxtons' case, they didn’t make it clear in the OFT’s view that the charges would be made.
As such, if you are considering using an agent, then it’s essential to make sure you understand all the charges that you will incur for the duration of a let, and a re-let of a property. Most landlords concern themselves and compare letting agents with percentage management fees, or finder’s fees. For example, an agent may charge 10% and another 15%, as a result you may think that the agent charging 10% is the more cost effective option.
However, most agents also charge a ‘set up’ or ‘admin’ fee. As a result, taking the case above, imagine the first agent charges no set up fee, just the 15% management fee. If the other agent charges £250 set up fee, alongside their 10% management fee, then the first letting agent may well be better value over the term of the let.
Want more information? Then read our article 'How to compare letting agents' property management services', call us on 01652 641722 or contact us via email.
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