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Whether or not the agent can change the fees will depend on the terms you signed. If fees are clearly stated and fixed then the agent cannot unilaterally change them, despite changes to the law as regards tenants' charges. You need to review your agency agreement to get the answer to that point.
The charge of 7% plus VAT (which they should always actually state as a gross figure) sounds very reasonable though, so if you are happy with the service stick with them. I suspect that if you were to speak with them they may allow a period of grace or change their mind in some way to suit you. You could point out that whilst your tenant is in place their costs have not changed, it's only on the change of tenant that they will lose out.
Assuming you have a standard AST an you are the named landlord, then the contractual relationship is between you and the tenant. If you were to end the management service you may be liable for the agent's lost income until the end of the agreement (as per the ToB) but the agent cannot stop you intervening in dealing with your own tenant.
7%+VAT plus £200 just to find a tenant and take in the rent is reasonable?
Most places round me charge half the first months rent +VAT for tenant find, on does not include taking rent but that's just giving tenant a different bank account to pay rent into (I keep a different bank account for each property).
I actually pay £200 + VAT for tenant find, that includes inventory and deposit protection and all paperwork. I can understand paying fully managed if you are a distance away, London charges do seem to be a bit crazy, I never understood this paying a percentage charge on tenant find. They find a tenant then if the tenant is in situ for say 10yrs they want 5%+VAT for 10years for doing that one bit of work. Your kitchen fitter does not charge you an amount for doing the kitchen and then wants a percentage of your rent for the life of the kitchen. My partner has a flat in London which she changed with advice from me to self managed as the fees were so high, the thing I would say to anyone about London fee's are they are negotiable, any letting agent that wont negotiate walk away, but you need to negotiate at the start of the tenancy, my partner is paid 5%+VAT tenant find for the first year then if the tenants stay its 2%+VAT per year. Which seems a lot better and fairer as the following year they don't actually do anything.
I have received letters from two of my agents this week. I agree with the comment that it is very late in the day to hear!
My local agent in south London writes that there will be no change to existing contracts but that when a new tenancy commences they will be charging more (they don't specify how much more). They state that they are committed to being the cheapest local agent (sounds suspiciously like a cartel???...........just saying). This sounds like a rather defensive move: I'll find out soon enough as I have a S.21 Notice outstanding for one of my properties with this agent
My Leeds agent in a letter dated 9th May will charge an additional £35 +vat on top of the existing £100 +vat for a new tenancy from 1st June. Their stated strategy to make up shortfall is to increase rents and to charge contractors a commission. Since my tenants normally stay a very long time I don't expect this to break my bank account.
I pay for full management in both cases and am happy with the services, although I keep an active involvement with them, checking all statements and querying anything I don't understand or don't agree with.
I agree with the comment in this thread that EAs have historically undercharged to get LLs on their books. I think we may see some dramatic changes as they seek to re-balance charging policy and practice. It's up to me as the LL to ensure that I get value for money by being an active participant in the contract. My agents know that I move agents when not satisfied and they want my business because I have good lettable properties with minimum issues
Good luck to All
Thanks for everyones input on this. After further negotiations with the agent they have agreed to keep the fee the same whilst this tenant remains. Although only a small amount I believe we need to fight to keep our costs down.
Tenants Fee Ban
Simple equations I'm sure....................
Letting Agents will look to increase fees to Landlords - make sure you have a good Agent who provides a great service and go with it - you'll be much better protected from legislative issues with an agent than on your own. Whilst the sector becomes more indirectly "regulated" you need to sure you're upto date with legislation. If you ever get problems with any tenants your "house keeping" and managing of the property will be highly scrutinised and if you're not upto date you're going to have problems.
Landlords need to offset fee increases by increasing Rent - or absorbing the costs to make less yield. Simples
World has changed and moved on - don't be caught in the "don't know what my agent does for his money group" unless you're willing to spend time and effort learning about all of the legislation you need to be up on and constantly reviewing.
Paul's reaction to fees being raised will be echoed all over the country by other landlords. You can't just raise fees while offering the same service as before without losing customers.
Making it hard to leave the contract with the agent may put off some landlords from leaving, but many more will shop around to find a new agent with lower fees.
Obviously I'd invite any landlords looking to go back to self-serving their properties to find their tenants with OpenRent.
The UK's largest letting agent. No admin fees for tenants, first listing free for landlords!
Proud OpenRenter, reluctant lead tenant.
Just been quoted Let Only’ fee moving from £395 + VAT to £595 + VAT.
justification 'This is due to the Tenant Fees Act 2019 coming into force from 1st June 2011'
Agent based in Nottingham
2011 was a very long time ago!
That's just the start wait for Corbyn to get in, then our problems as landlords will really start.
Don't know where you're based but that is a lot of money!