Reference Fees

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    Reference Fees

    My daughter and 2 friends have found a property through a letting agent. The letting agent is charging £125.00 per person as a reference fee plus £125.00 per guarantor (which each girl requires) as a reference fee. The letting agent have just made £750.00. When and if the tenancy is signed they will want one months rent in advance plus 1.5 months payment for the deposit. Is this all normal, just and/or legal?

    #2
    Fees: depends on the going rate locally. BUT why is Agent (A) charging T at all? A acts for L only- so L should pay.
    Rent for month1 + deposit: yes.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      The letting agent will use an outside company to run all sorts of checks on tenants and guarantors. Obviously, if the tenants pass the credit check then there is no need for those checks to be carried out on the guarantors. Rates do vary from area to area depending on market forces, and there may be room for negotiation as £125 is considerably more than I would expect them to pay.

      The rent in advance is - well - payment for the rent so that is hardly unreasonable.

      The deposit is returnable in full at the end of the tenancy providing the tenants fulfil all their obligations. Hardly unfair - it is no where near enough to cover the potential for unpaid rent/damages etc that the landlord could be exposed to - hence the need for guarantors.

      Comment


        #4
        I'm afraid this is the going rate (depending on your location) for reference fees. However the landlord could source the references themselves if they so wish depending on the arrangement they have with the LA.

        I cant advertise my company on the the forum but as an example we will do a comprehensive reference including reference and employment validations for £25 plus VAT per applicant.

        Maybe you could have a word with the landlord to see if he would look at using someone other than the LA for the references.

        Comment


          #5
          I think you should have questioned the fees before paying.
          Allow tenants to protect their own deposits. I want free money when they do it wrong

          Comment


            #6
            Originally posted by jeffrey View Post
            Fees: depends on the going rate locally. BUT why is Agent (A) charging T at all? A acts for L only- so L should pay.
            Rent for month1 + deposit: yes.
            A acts for L but on L's behalf so A will charge a prospective T their admin fee to do any checks (it's T that's been checked not L). L has already paid as L will have paid A a finding fee and/or a management fee.

            Most A's charge less for a second applicant - I've just paid £150 for me plus £50 for my partner to be checked (plus VAT).

            Comment


              #7
              Better:
              1. A stipulates, in Agency Agreement, that L (client) is charged a fee.
              2. L stipulates, in Tenancy Agreement, that T must reimburse L on completion (as a pre-condition for handover to T).
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Originally posted by jeffrey View Post
                BUT why is Agent (A) charging T at all? A acts for L only- so L should pay.

                Nooooooooooooooooooooooooooooooooooooooooooooooo!


                I have explained this so many times!

                If you are a prospective T, you DO have a contract with the letting agent who finds you somewhere to live.

                That contract says : "I, the agent, from Ripoff and Dodge Ltd.,will find you, Mr Poor Person, somewhere to live if you pay me some extortionate sum e.g. £125". The T says "OK".

                The A also has a contract with the LL (before either of them has even clapped eyes on the T) which says : "I, the agent, from Ripoff and Dodge Ltd., will find you, a LL with an empty property, a T, if you pay me some extortionate sum like half a month's rent for the property". The LL says "OK".

                In both cases it's money for old rope (as far as A is concerned) but it is a contract, I believe.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                Comment


                  #9
                  Anyone disagree with the above?
                  'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                  Comment


                    #10
                    Who'd dare? Aggressive or what?
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment


                      #11
                      MTG, I do agree with you.

                      And just for clarity, the contract T does have with A in this instance is not one of agency, but one of supply.

                      HOWEVER, A must disclose to L if A is making a profit in this way, otherwise, in the absence of any disclosure in the agency agreement with L, A is in breach of its common law duties to L.

                      Unfortunately, prospective T has no legal right to talk to L directly, so A will say, get a reference through me or you won't get this property.

                      The only thing A can't do is charge T money to provide him with the address of any prospective property.

                      Agents profiteering you say?... never.

                      Comment


                        #12
                        Originally posted by jeffrey View Post
                        Who'd dare? Aggressive or what?
                        Well, I'm fed up of being told (by you!) that the agent has no contract with the tenant!

                        Clearly they DO!

                        As student tenants, my kids have had to shell out hundreds over the last few years to the grasping blighters to "introduce" them to LLs. Do you really think we would have paid out all that money if we didn't have to?
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment


                          #13
                          Er, you don't.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                            #14
                            Originally posted by jeffrey View Post
                            Er, you don't.
                            In reality, yes we do, unless we are happy for our children to sleep on park benches. Which we aren't.
                            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                            Comment


                              #15
                              The answer may be to approach L direct and cut-out the middleman.
                              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                              4. *- Contact info: click on my name (blue-highlight link).

                              Comment

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