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How to avoid rip-off Letting Agent Administration fees

Anyone can set themselves up as a letting agent and most of people have heard horror stories about tenants suffering at the hands of dodgy or incompetent agents and being hit with demands for exorbitant fees for spurious services.

In recent years lettings agents have come under more scrutiny. A big problem is that with less properties available more people are desperate to find accommodation.

Unfortunately some less scrupulous lettings agents take advantage of this and it is vital that you are aware of what you are paying for, when you are paying and whether or not it is legal. Housing charity Shelter discovered almost a third of agencies were charging renters more than £400 to set up a tenancy, in addition to the deposit and rent upfront.

According to a survey of 32 letting agents by the consumer reporters Which none of them provided information about fees on their website. The survey also found that less than a third of tenants received information about fees from the agent before they personally asked and The Office of Fair Trading recently found that of 4,000 complaints made by tenants and landlords to Consumer Direct about lettings agents, a third related to fees and additional charges.

More disturbingly other recent surveys have found that tenants have had to borrow money or do without heating or food in order to pay rent and pay the additional fees involved.

This is why it is vital to ask agencies directly to detail the costs involved so you can compare their services with other agencies in the local area.

The good news for those renting in Scotland in the UK is that the government banned letting agents and landlords from charging any tenant fees.

Ministers said the law would be clarified so that all charges to tenants other than rent and a refundable deposit will be deemed illegal.

There is no sign of this being extended to the rest of the UK and so many will continue to be charged for things such as checking references, credit checks, providing an inventory, handing over keys, phone calls and postage. Also watch out for tenancy renewal fees and late payment fees.

The type of fees charged and how much they cost vary depending on the letting agent and where you live. All letting agents, for example, charge a non-refundable admin fee but this can be anything from £90 to £375 or more.

The admin charge supposedly covers the cost of drawing up paperwork for the tenancy agreement and carrying out reference checks with your bank and employer, however, some impose layer upon layer of additional charges on top of this. These can include holding fees to secure sought-after properties, charges to perform a credit check and even a fee for taking your deposit. Some also charge up to £144 for drawing up an inventory.

Usually the landlord covers the check-in charge and the tenant the check-out charge but increasingly tenants are being made to pay both. In some case, landlord and tenant are charged for drawing up one inventory.

And the charges don`t stop once a tenant moves in. Frequently, there is a £90 fee for renewing a contract.

The tenant will almost certainly be asked to hand over a deposit (usually a month`s rent or more) and the first month`s rent in advance before they move in.

Don`t pay a fee to register with an agency or for getting a list of properties as it is a criminal offence to charge for those.

Always get clear information about a letting agent`s fees. Use one that is a member of a body or scheme such as the UKALA, ARLS or NALS.


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