UK Landlord Forum / Life

I am landlord previously i was happy to pay 10% "managed property" where the fee was deducted monthly.

Now i am going "let only" which as i see is effectively an introductory service, just like dating. They want their 6.5% fee of the annual rent payable all upfront from the first month rent- is this standard in the industry?

If i was to accept this, i am somewhat surprised they then are expecting four years of renewals, it begs the question, if they are an introductory service and charging as such, what service are they proving in the subsequent years for the consideration.

I have only a verbal agreement of the 6.5% rate, the tenant has moved in and i have not signed any TOB with the agent, only the rental contract.

Suggestions welcome.

Robert

Fee up front is standard unless you can negotiate this away.
4 years of renewals?!? Never heard of that.
You should at least agree not to pay 6.5% for subsequent years. 

It's up to you whether you will renege on an agreement verbal or (not) written.

There is an agent DavidM on this site ....he'll have some good insight...

Best of luck.

You are taking their Tenant Find service, I presume? This is usually a fixed fee, paid when the tenancy starts.

Do not pay up front. You want no Tenant no fee.

Do not pay any form of renewal. It's nothing to do with the Agent behind Tenant Find unless you are mistaken and they are providing some other ongoing service for you.

Thanks for the advice, basically I have agreed on Let only, which is in effect an introduction only service, the agent provides the tenant and credit checks, no inventory, no checking and no management, they want 6.5 per cent of the annual rent of 18k, which is the best part of the first month rent gone. I am horrified they the contract wants to lock in renewal for 4 years, I am not happy and will not sign although the tenant has already moved in.
For the renewal with the same tenant I am a loss as to would service the agent performs, I understand the OFT is investigating this.

You've paid someone over £1,000 for Tenant Find?

The Tenant will have paid them an application fee and for their credit checks, I assume?

Nice work, if you can get it.

Upad next time, maybe?

Yes sorry should have been clearer in my post. It's not fee "up front", but what I meant is when they find you a tenant and the tenant moves in and pays the first rent they deduct the full years fee from that first payment.  At least that is how it is in my area.

So not fee up front. Slack typing on my part. Apologies.

I have seen some agents put in a clause that says if the tenant stays and they renew the tenancy agreement they get another fee (6.5%).
The easy way out is not to renew the tenancy agreement and let it become periodic.  By definition the tenant can leave with notice so there is no way for the agent to ask for a full years fee.

I have never accepted such a clause anyway and always struck it out.

The four years lock in is ridiculous.

Anyway not sure why you are worried you have the tenant and no written agreement, best negotiating position ever....assuming you took the deposit and the rent is being directly paid to you?

Just strike out the clauses you don't want.  Almost all agents are after the money and usually will turn a blind eye to the odd clause struck out here and there.  Future income for them isn't guaranteed so to get the today's fee will likely assuage any ill feeling. (I assume you agreed to the 6.5% fee).

Best of luck

A years fee up front is pretty standard for a tenant find service but most agents would have a reducing fee for 2nd and subsequent years. You say "if I was to accept this" but I am concerned that you already have by allowing the tenants to move in knowing what the agents fees are? The fact the terms of business aren't signed is less important than the fact they were given to you (presumably when you instructed them).

As an agent In know that I have to compete with online DIY agencies like Upad or Openrent and so have to be flexible how I structure my fees. Generally most landlords who come to us have far less knowledge than most posters on this forum so need guidance and are happy to pay for it but if someone comes to me and asked me to do a simple tenant find and they would take care of everything else then I would give them a discount and even possibly (don't spread it around) waive renewal fees. The important part though is to ensure you do your negotiating up front in future as agents tend to be far more flexible when they want your property than when they've done the work and found a tenant.

Realistically is your tenant likely to stay for 4 years as all this may be academic anyway?