Letting Agency Renewal Fees - The Lettingfocus.com view
I recently did some consulting with a chap who was not happy that his letting agent was going to charge him to renew his tenant’s contract – the original tenancy had been arranged through the agency.
My view is that all landlords must read the contract with the letting agent BEFORE they sign it. If they have signed to say they agree to being charged a renewal fee then that’s tough, I’m afraid.
I’m not an agent but on the matter of agency fees, my view is that agency letting fees are not high as long as you avoid renewal fees.
Simply extend the tenancy - doing this should not involve you or yuor agent in any work, except simply asking the tenant if that's OK with them.
In fact, a friend of mine has just asked me if I would find a tenant for him whilst he is overseas. My answer was No.
What A Letting Agent Does to Find a Tenant
Putting in adverts, doing viewings on wet evenings and weekends, checking references, doing check ins and dealing with the general public and the like is all a lot of work – and not something I would personally do for the going rate agency finding fee of around 8 to 10% plus VAT.
Sorry, but I have better things to do than that – which is why I like to keep my tenants by keeping my rent increases reasonable and my rents below the market average.
The reality is that there is not much cash in lettings – agents often use it as a loss leader to get more lucrative work selling properties.
This is why they often try to make some extra money by charging renewal fees – even though they often don’t do much at time of renewal – and why they always try to load up fees for other services like printing off copies of tenancy agreements and making charges to tenants for doing references etc.
New Tenancy Agreement
In this particular case the agent wanted to issue a new tenancy agreement.
I said that, seeing as the landlord indicated he did not want to necessarily issue a new longer term tenancy, why not just extend the existing one to make it a periodic tenancy.
One benefit to doing this would be that the landlord would not need to join a Tenancy Deposit Scheme because the original tenancy started before April 2007 – i.e. before TDS became compulsory. So, he would save on the hassle and / or cost of having to register for TDS because TDS is not compulsory for Tenancy Agreements starting before 6 April 07.
If you need more advice on where to letting agency fees ask me. I’m David Lawrenson from property investment experts http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on UK property investment and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog and run a property investment advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my landlord blog and details of my networking, advice, property seminar programme at my website http://www.lettingfocus.com/
Click here for details of my next London landlords networking meeting.
What’s unique about lettingfocus.com is that we offer independent property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.
My view is that all landlords must read the contract with the letting agent BEFORE they sign it. If they have signed to say they agree to being charged a renewal fee then that’s tough, I’m afraid.
I’m not an agent but on the matter of agency fees, my view is that agency letting fees are not high as long as you avoid renewal fees.
Simply extend the tenancy - doing this should not involve you or yuor agent in any work, except simply asking the tenant if that's OK with them.
In fact, a friend of mine has just asked me if I would find a tenant for him whilst he is overseas. My answer was No.
What A Letting Agent Does to Find a Tenant
Putting in adverts, doing viewings on wet evenings and weekends, checking references, doing check ins and dealing with the general public and the like is all a lot of work – and not something I would personally do for the going rate agency finding fee of around 8 to 10% plus VAT.
Sorry, but I have better things to do than that – which is why I like to keep my tenants by keeping my rent increases reasonable and my rents below the market average.
The reality is that there is not much cash in lettings – agents often use it as a loss leader to get more lucrative work selling properties.
This is why they often try to make some extra money by charging renewal fees – even though they often don’t do much at time of renewal – and why they always try to load up fees for other services like printing off copies of tenancy agreements and making charges to tenants for doing references etc.
New Tenancy Agreement
In this particular case the agent wanted to issue a new tenancy agreement.
I said that, seeing as the landlord indicated he did not want to necessarily issue a new longer term tenancy, why not just extend the existing one to make it a periodic tenancy.
One benefit to doing this would be that the landlord would not need to join a Tenancy Deposit Scheme because the original tenancy started before April 2007 – i.e. before TDS became compulsory. So, he would save on the hassle and / or cost of having to register for TDS because TDS is not compulsory for Tenancy Agreements starting before 6 April 07.
If you need more advice on where to letting agency fees ask me. I’m David Lawrenson from property investment experts http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on UK property investment and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog and run a property investment advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my landlord blog and details of my networking, advice, property seminar programme at my website http://www.lettingfocus.com/
Click here for details of my next London landlords networking meeting.
What’s unique about lettingfocus.com is that we offer independent property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.
Labels: letting agency, letting agent fees, letting renewal fees, renewal fees, tenancy agreement, Unfair letting fees
This entry was posted by lettingfocus, on
Thursday, January 31, 2008.
