Reasonable costs

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  • Reasonable costs

    Hi All,

    I am just editing my AST before my tennant signs. I was just wondering what would be reasonable costs for sending reminder letters and for cheques/debits that do not clear.

    Thanks

    Matt

  • #2
    You can (iirc) only charge the actual costs involved.

    So, if a bank charges you because your tenants cheque bounces - you pass on that fee.

    If you go overdrawn because the tenant doesn't pay - you can't charge for that.

    I would be inclined not to charge for letters. For the few pennies that they cost to produce, the bad feeling such a charge would incur isn't worth it.

    Some people charge interest on late payments. A charge of 3 percentage points above the BoE base rate would be fair - but again, at the moment it is pennies - around 82p per day on a £1000 rent - so probably not worth the hassle.

    Comment


    • #3
      Originally posted by Snorkerz View Post
      You can (iirc) only charge the actual costs involved.
      Rubbish!

      Legally (not morally, I might add), you can agree whatever charges you want. This is a contract, with both parties agreeing from the outset what fees will be incurred when and on what events. There is nothing* stopping you from making a profit.

      *Some charges, if challenged by the tenant before a judge, may be deemed "unfair" and therefore unenforceable, but it has to be ruled thus by a judge.

      Comment


      • #4
        Agree, you can charge for unpaid rent, I wouldnt charge for reminder letters though.

        If they dont pay up and the banks hits you, why should you bare the costs when the T is at fault.

        Comment


        • #5
          Originally posted by dominic View Post
          Rubbish!
          *Some charges, if challenged by the tenant before a judge, may be deemed "unfair" and therefore unenforceable, but it has to be ruled thus by a judge.
          Exactly, that why when my LA tried to charge me £25 "admin fee" for later payment of agreement renewal, I simply refused and told them to start court procedure if they want. In fact I did send it in time, but they lost my cheque, so I had to send them another one. In result this fee was dropped...

          I wouldn't worry about small fees and would raise rent instead if I really wanted to cover admin expenses...

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          • #6
            For L's ability to levy variable administration charges, s.158 of 2002 Act (and Schedule 11 to the Act) will deal with the legalities.
            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).

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            • #7
              Originally posted by Snorkerz View Post
              You can (iirc) only charge the actual costs involved.
              Originally posted by dominic View Post
              Rubbish!
              So, you wern't impressed with my comment then? I thought punitive charges were 'unfair', but obviously I was wrong.

              Comment


              • #8
                Originally posted by Snorkerz View Post
                So, you wern't impressed with my comment then? I thought punitive charges were 'unfair', but obviously I was wrong.
                These are not damages, but a debt agreed at the outset which would be owed in consideration of LL doing some act.

                You may instead call these excessive charges, but prima facie they are enforceable against T.

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