UK Landlord Forum / Life

Hi,

On behalf of holding my tenants security deposit for me, my estate agent want to charge me a fee for holding the security deposit under the terms of the Tenancy Deposit Scheme. 

Is it normal for estate agents to charge the landlord a fee for holding tenants deposit under the terms of the TDS?

Thanks!

Hey Noobie,

Some deposit schemes charge a premuim, so your agent might be charging you for that. But there is a free scheme available (http://www.depositprotection.com/), which they can easily use.

I don't think they should charge you extra for it, personally.

Hi Propertyfag,

Thanks for answering my question! 

I checked with my letting agent and they said that they found over the last year, the paperwork took up a lot of their time, especially if they have to deal with a dispute.  But I told them that surely this admin work is included in the monthly management fee that I am paying them for (which is 12% as it is plus VAT)!?  When I told them that I could use the free scheme, they turned around and said no I couldn't and basically I would have to pay the fee, end of story.  Even though their T&C's states very clearly 'If we are instructed to hold the deposit then we charge a fee of ....' And then they hit me with their membership cost that they have to cover!?

Paperwork? That's ridiculous! There's barely any paperwork! And they don't deal with the dispute (if there is one), that's what the TDS is for!! They deal with it.

Their T&C's sound wrong. The agent's aren't even meant to hold the fee!!! Again, that's what the TDS is for- they hold the deposit directly!

Instruct them NOT TO hold the fee, and tell them you will arrange everything! Contract clearly states that "IF THEY ARE INSTRUCTED..." They can't go against their own T&C's.

Sounds like they're trying to make a quick buck.

What paperwork? - My thoughts exactly, thanks Propertyfag!  Apparently if they have to deal with a dispute then a lot of time goes into the paperwork and maybe for the time it takes to update their spreadsheets?!

So I went back to them and said that I didn't want to pay and could hold the tenants deposit myself.  They then told me that they would have to charge me £50+VAT to draw up a new contract to reflect this.  I replied by saying that their T&Cs which is a legal binding document specifies 'If I instruct them to hold the deposit etc...' And that the following paragraph says 'If you decide to hold the deposit you must instruct us before tenancy commences....' (of which I am doing as the tenants haven't even signed the paperwork yet). 

The letting agent started to get really annoyed telling me that I was disputing over a petty little fee (£70) and for the sake of ending the conversation, they would drop it.  BUT to remember that they are bending over backwards for me by giving me a reduced management fee and not charging me for drawing up the the tenancy agreement (which is a template agreement anyway!).  Basically I am supposed to feel VERY grateful to them for bowing down to my demands.

So, thanks for your advice encouragement Propertyfag, I got the fee taken off!

Excellent!
I'm happy you got it sorted. A lot of the times letting agents just try their luck because they hope all new landlords are stupid consequently they'll just rollover.

And £70 isn't petty!!!

Thanks for the comment about estate agents and new landlords.  You sound like an old pro (at the letting game that is!) - don't suppose you have any bits of advice?   

Bending over backwards? REDUCED management fee? Blimey - looks like they will be giving you the shirts off their backs next!

The deposit schemes ARE free however the insurance based schemes allow you to keep the deposit money BUT you pay an insurance to cover the deposit in case of dispute. I know you know this already BUT I would tell your Agents to go take a long run off a short pier. They are ripping you off BIG STYLE!

NEGOTIATE fees!

Jools

 Hi I have just joined the fourm

And I have a question about the deposit scheme?

I wish to get my tenants deposit back off the letting agent is he allowed to hold on to the deposit or has he to release it ?

Hey chynouth,

Your agent shouldn't be holding the deposit. The tenancy deposit scheme you're using, should be holding the funds.

The agent may be operating under the mydeposit scheme where they hold onto the deposit but pay an insurance premium. The only person who can get the deposit back is the tenant. Why are you trying to get hold of it?

Hi Guys

Thanks for that I am not trying to get hold of the deposit. I didnt want for the tenant to lose it when I sack the letting agent. I have since found out which scheme the tenants deposit is in and have informed her as she didnt know. She was close to leaving the property as she wasn't getting any joy from the letting agent about things she wanted doing. And I wasn't gettiing the right money paid in rent  and was getting charged for jobs not being done. But I have now spoken and met with the tenant and we are getting it sorted between us. Many thanks for all your help.

Good!

If your agent holds the deposit and then goes bust YOU the LANDLORD are still responsible for repayment!

FYI

Jools

Hi Nooby,

I've a few properties myself and I used to use the free tenancy deposit schemes, now I bypass the whole thing altogether and save time and money.

I don't think an estate agent should be charging you for something you can do for free... ps are they an estate agent or a lettings agent?

Maybe you should think about self managing?

try this website www.tenantdeposit.com
they work like this: £35 pound fee paid by tenant and a premium of £0.12 a day paid by tenant no deposit is even needed and you save money - would  a tenant prefer to pay a £35 fee or a £500 deposit?

or try www.mydeposits.co.uk it's a government approved scheme run by the National Landlords Association which allows you as a private landlord to hold the money in your bank account you register as a landlord and you can hold all your tenants deposits in there you pay a small premium of around £27 to protect that deposit!

Hope this helps...



Tim

Hi all, about my last post I just wanted to add that I saw this on another forum:

'please be aware that there is a deposit scheme set up in Birmingham. They claim to be part ot mydeposits (the scheme run by Hamilton Fraser).

This message is on the mydeposits website:

WARNING: mytenancydeposit.co.uk is NOT part of mydeposits.co.uk. This company does NOT operate a Government-authorised Scheme. Any letting agent or landlord using this company should be aware that their deposits will NOT be protected.'

http://www.mydeposits.co.uk/news/pressreleases/20090604-urgentstatment-mytenancydeposit-co-uk.htm

worth knowing!!!!

Regards

Tim

Hi noobie,

I plump for the Deposit Protection Scheme set up by the government. You can set it up all on-line then pay the deposit in on-line. All you have to do is get the deposit off the tenant at the beginning of the tenancy. When the tenancy finishes you agree for the deposit re-payment to be made (on-line again) and it goes by bank transfer directly to the tenant.  It cost you and the tenant nothing.  DPS make their money from the interest they get holding the deposits. Simple.
If you like doing things on-line then I can recommend TennantVerify for credit/personal vetting of prospective tennants. Costs around £30 per check for the detailed one. Takes only a couple of days.  I always take a holding fee of £100 from a prospective tennant which goes back to them if they take up the tenancy less the cost of the credit check.  This stops time wasters and means you aren't out of pocket if the prospective tennant withdraws at the last moment. If you have guarantors, you need to credit check them as well.