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Letting agent increasing management fees

Started by vpr1, February 12, 2019, 02:21:05 PM

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vpr1

Hi,

I have received a letter from my letting/management agent, saying that from the 1st of April they are going to increase there percentage by 2%+VAT. They are stating that the reason for this is that their costs have increased over the past years. I have been with them for aprox 18 months and when i first agreed for them to act as my agent i agreed a fee of 9%. I have a signed agency agreement form that clearly states this figure and there is no mention on the form that they have the right to increase the fee at there discretion.

I therefore believe that legally they can not increase their fees without me signing a new agreement and to do this they would firstly have to give notice of cancelling the current agreement (3 months notice) and then request that i sign a new one at which point i would be free to go to another agent without the £350 penalty stated in the agreement.

Can someone please advise if the above assumption is correct?

Is anyone else seeing agents increase fees?

Thanks

KTC

If you've double checked your contract with them and it doesn't give them rights to increase their fee by notice, then you are free to reply saying you don't agree with the proposed increase and are holding them to the prior agreed fees, and that they are free to serve notice to terminate the contract.

Tenant Fees Act received Royal Assent today, expect to come into force June, I expect the increase is down to that rather than increased cost over the past years.

vpr1

Thanks for the reply,

I've double checked the agreement document and their website for terms and conditions and cant find anything that says they reserve the right to increase their fees, and the rate i agreed is clearly shown on the front of the document. Also the fees they show on their website are still the old fees (I've made a copy of this document as well)

I totally agree that this is probably to do with the Tenant fees act especially as they reference this later in the letter. Interestingly, they are also suggesting to me that i might like to consider increasing the rent on the property to  cover the additional cost! If this was the case then the Tenant will still end up paying tenant fees, but as an increase in rent and will probably end up paying more as they will be paying these for the whole of the tenancy!

I will do as your suggesting, i think i might also suggest that they give me an exact break down of the management costs that relate to my property and that they show me exactly how they have increased by 2%

Hippogriff

Quote from: vpr1 on February 12, 2019, 03:38:43 PMIf this was the case then the Tenant will still end up paying tenant fees, but as an increase in rent and will probably end up paying more as they will be paying these for the whole of the tenancy!

Er... yeah... isn't that what every Landlord out there will do? If you're not taking advantage of the opportunity (vs. challenge) then you're having money lifted out of your pocket in the long-run - better that the money is lifted from another pocket (not yours). Remember, times are hard for Landlords... we're getting it from all angles. And we can't even count on the support of our friendly Agents... talk about biting the hand that feeds.

Quote from: vpr1i think i might also suggest that they give me an exact break down of the management costs that relate to my property and that they show me exactly how they have increased by 2%

It's not pertaining to your property, alone, though, is it? It'll be all their Landlords who are receiving the letter... maybe they have a big Christmas party budget. Asking for a breakdown..? What would you even do with the information? They probably charge you a flat fee, come rain or shine (maybe excepting for some special things)... it's called a business model. As long as you realise you're a mark... then you'll do OK. Stick to your current plan... politely decline the increase, see what their next move is. It could be fun.

heavykarma

How ever they dress it up,agents will make sure they don't bear the brunt of the legislation.I am waiting to see what creative thinking my bloke will come up with.Like they say about bookies,they never lose in the long run.

vpr1

I do know that ultimately they will ensure that they are not out of pocket and will find another way to gain back the fees some other way, which is very likely to increase costs to the landlord and yes ultimately i will ensure i'm covered by increasing the rent. The point i was making was that my agents are using the opportunity to increase their profits by increasing their % and forcing up the rent giving them an increased monthly income rather than a 1 off payment which they only get when tenants move in.

I also dont like the way they are handling this, they are proposing to increase my rate to 11% +VAT from April 1st (6 weeks), if I increase the rent then i have to give 3 months notice I will therefore be out of pocket for the first 2 months. Both myself and the agent are both businesses that have to work together for us both to make a profit, i would therefore expect in these circumstances that they would approach me first with a plan to ensure that we are both not out of pocket before enforcing it.

I am also slightly concerned that they would miss an obvious legal oversight of trying to enforce a fee increase without giving me a new Agency agreement to sign. They are acting day to day on my behalf and you would hope that they would be checking everything they do is legal before acting on it.

Hippogriff

Ah, a dreamer. There's how it should be and there's how it is... to the Agent you're a mark, a cash cow, not a partner... not even anything as grand and important as a customer.

Hippogriff

Quote from: vpr1 on February 13, 2019, 10:19:21 AMThey are acting day to day on my behalf and you would hope that they would be checking everything they do is legal before acting on it.

This actually made me spit out my tea! I curse you!

eps501

Cut your losses, serve notice or be served notice, look for another cheaper agent or manage your property yourself. It is what it is, ability/willingness to adapt will sort everyone out. Oh and no one will or should care about you or your business as much as you do.

vpr1

I think you're right, i am probably disillusioned that there might be an agent out there who carries out there business in a professional manor rather than like an estate agent, as they are all associated with estate agents! I'm probably not going to find a good one so i might as well go for the cheapest!