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  • Buy-to-Let

    Letting agent fee increase

    I have just received a fee increase email from a letting agent I use for one of my properties. 

    This is due to the tenant fee ban which they are trying to recover via increases.  Whilst I sympathise with their position I would rather switch this property back to self management. 

    I just tried to give notice and was told that it was in their T&C's signed by me that I could not take the tenant private. 

    This means I have to give the tenant notice in order to terminate the relationship with the agent.  I am guilty of not reading all the T&C's but would this be classed as an unfair condition? 

    Also, can they hold me to our agreement if it is them that is changing the terms via increased charges?

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    I would contact the tenant and explain the situation that you intend to self manage moving forward and that due to the T&C's you signed, you have to serve them notice but that you will issue them with a new tenancy agreement once you have served your notice period with the agent. (our landlords agreement is a 3 months notice period).

    I would say it's an unfair condition (we don't write that in our contracts). It's debatable they can hold you to the agreement as they are changing their terms via increased charges and it seems they haven't given you much notice if you have only received this month in May when I would imagine they are changing their terms from 1st June. (we wrote to all our landlords in March giving them 3 months notice of our intended changes, charges and explaining why we were having to do)

    If they hold your tenants deposit, that will need to be returned to your tenant and you'll have to reregister yourself in one of the governments schemes.

    Out of interest Paul what were their changes / charges?

    Summary of how it's effected our Landlords below.....

    https://www.propertytribes.com/so-about-t...198-4.html

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    Thanks for that.  Yes not much notice but I am generally happy with their service and fees.  Their charges were 5%+VAT and now rising to 7%+VAT

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    Must be a very competitive area, I certainly couldn't survive on 5 or 7%......rather than increase our % we opted to charge a Tenancy Set Up fee to Landlords of £125 taken as a disbursement from the 1st months rent on any new tenancies from 1st June 2019 (we used to charge tenants £125 per tenancy) we haven't had any comeback, a few clarifiations but they have understood once explained.

    I think many have left it to the last minute as they didn't know what to do for the best and may also have been waiting to see what others were doing, it's not ideal but if they have increased 2% and are not charging for anything else it's comparable over 12 months to what we are charging, but if you have long standing tenants which many of our landlords do, then our option only effects them if their tenants move on and we put someone new in.

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    This agent also now charges a £200 admin fee on new tenancies.  Still debating whether to just pay up and increase the rent slightly via S13 or self manage.  Property is about an hour and half away from me so may be worth the cost.  I do self manage my more local properties.

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    That's abit naughty, increasing the management 2% and also introducing a £200 admin fee on new tenancies as well......for me it was a choice of one or the other, but we are being squeezed in all areas, costs of being a fully compliant and effective letting agent have risen this year, Client Money Protection £400 - £600 + VAT, minimum wage increases, increasing portal subscriptions Rightmove, Zoopla etc (we only advertise with onthemarket now as RM and Zoopla were wanting £800 + VAT and £300 + VAT per office per month! at any given time we only have 2 - 10 properties available across both offices, you do the math, could you justify paying those? I couldn't.....) we manage just over 200 properties via two offices and discussed the other day Net Profit is just under £20 per property per month after all costs, 2 Offices, 2 Cars, 2 Full Time Staff and 2 Part Time Staff. (Our average rent is £480 PCM, Gross £48 per property per month)

    Believe me it's alot of work for not alot of money! That's why I said I couldn't survive at the 5 or 7% your agent is now charging, he certainly won't be flush with cash after all his costs I'm sure especially if he only does lettings.

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    now that is a rip off.

    btw: the 5% + VAT fee - what is that for? Tenant Find OR Full Mngt? if the former then that is in line with what can be found here in London.

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    This is a south London property and the 5% is for tenant find and rent collection, not full management.  New tenants are now charged at £200 also.

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    Seems very unfair, wrong and underhanded. I am being asked to manage more stock in and around Liverpool as investors either haven't been happy with a service they have recieved or they want a bespoke personal service.

    Are you in a position to give notice to your EA, move to another EA and a short term deal and then terminate that.

    Seems more sensible to be and doesn't get the tenant involved or unnecessary worried. Alternatively speak to your current EA and ask are they really to enforce a clause in a contract that may not be worth the paper its written on.

    On principle I would personally move to self manage if this is what you do.

    Just get a reliable local maintenance resource.

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    Agent fees to landlords have been artificially low for many years since estate agents started to play at lettings, needed to attract landlords and chose to advertise low landlord fees and subsidise by charging a fee to tenants.  Now with the tenant fee ban the balance will have to be redressed.

    Regarding the tenants,  they are your tenants not the agents tenants, the agent must always act in the landlord's best interests.  Is giving notice to good tenants best interest?  I would suggest not,  agent cannot serve notice without your consent so simply give agent notice and confirm that tenants are not to be given notice.

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    While that may be the case I will be surprised to see if estate agents get away with charging more for their services in a market that has fundamentally been transformed by the internet.

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