Management service asking for £1817 for the first instalment of the letting fee?

Landlord Discussion Property Investment
1

Hello all

so i am new to the landlord thing, because i am wet behind the ears i have signed up for the management service from my letting agent - when i am more familiar with everything i will probably switch to the cheaper service.

ANyhoo, my lettings agent cahrge 14% incl vat for management service. i thought this was bad, but then they are now asking for what appears to be an additional upfront free of £1817 - the invoice says that this is the “first instalment of letting fee”. The rent is is only £1300 so accordling to my calculations the first instalment of the letting fee is only £182 per month so I cannot understand what this is for and i have emailed and phoned them but havent heard from them

THe tenants are due to move in, and i have paid for an inventory charge and all sorts so its all systems go but was just wondering if anyone knows what this could be for? Or am i being scammed (they are apparently a reputable letting agent tho).

Cheers all

2

Sounds very odd. In a normal (and straightforward ) world, you would think that the agents would take their 14% fee from the monthly rent on a monthly basis and then pass on the remainder to you. Check the contract you signed with your agent or their published T&Cs.

I used an agent for my very first let. A well known and established national agent beginning with a C and ending with an S. Never again. Every let since then I have found and organised myself and without any drama.

3

I think you are being ripped off and you have not read the contract. Only let thru Openrent and no one else

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4

that may be part of an arrangement fee , of 6 weeks rent,I feel you are in for a big shock

5

Some agents charge their fees up-front for the duration of a fixed term tenancy. You will probably find a clause in the contract stating that this is non-refundable, meaning that if the tenant they found does a runner, they will keep the fee.

Contracts are a negotiation, so read yours and argue about the points you don’t like. If you can’t agree, go elsewhere.

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6

For fully management you do not have have pay up front and it’s always monthly payments.
You can challenge your estate agent and also you should able to change it.

7

Hi Nilesh. Thanks for your response. They have now agreed to split the management fee over 6 month . My plan is to cancel the management fee after a few months.

8

Thanks Prafula Thanks to the great advice on this site, I have managed to negotiate payments over 6 months

9

David thanks so much after reading your post I asked them to spread the cost, I asked for 12 months but they agreed to 6 months which isn’t too bad

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Colin yes sound advice I will look into cancelling the management service and using openrent . Thanks so much to everybody, had really great advice from you all.

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11

If you mean that you will cancel the management fee payments before the full cost is paid, the agent may find you in breach of contract and sue you.

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12

They said I can cancel at any time. If I owe them or if they owe me they will refund the balance. I got that in writing. They, of course, are not refunding the lettings fee tho.