We are very open with our fees for both Tenants and Landlords but why do these extra charges exist? There is a great deal of work to be done prior to the tenancy start date and we incur costs.
When an applicant contacts us, the team will spend time with the applicant to show them various suitable properties and help inform them about current rental market prices. This could involve one or two days when a member of staff is out of the office focusing solely on one applicant. The team will negotiate with landlords in order to help secure an agreement between the two parties. Whilst we act for our Landlords, ARLA requires us to have a duty of care to our Applicants.
So far the team’s service has been free – if either the landlord or the applicant withdraw, we earn nothing. We don’t charge the landlord for marketing their property (including the cost of professional photographs, floor-plans and advertising) in any event and our fees are only due once contracts have been signed by both parties.
If the two parties agree on terms and a price, prior to the start of the tenancy:
For the landlord, the team will:
1)Create the tenancy related documents, including the Tenancy Agreement.
2)Organise a Gas Safety and Electrical Inspection Certificate
3)Organise the professional cleaning of the property.
4)Organise an inventory of the property by a professional third party inventory company
5)Organise pre-tenancy maintenance works if necessary.
For the Applicant the team will:
1)Organise reference checks by a professional third party referencing company.
2)Create, explain and negotiate the Tenancy Agreement for the Applicant
3)Hold the Deposit in a ring-fenced client bank account
4)Register the deposit under a Tenancy Deposit Scheme
5)Write to all utility providers and local Council to transfer services to Tenants name.
As an ARLA Licensed Agent, we disclose ALL of our fees upfront. There are no hidden charges. Why do we have these fees? Simply put - we incur costs. Each Agency has different costs based on their overheads and ours are calculated to ensure we do not lose money on a transaction.
Looking at the Sales market, the role of producing documents is usually undertaken by a solicitor. If we were no longer able to charge a modest fee for the documentation and our service, landlords and applicants would be faced with using solicitors to create documentation for lettings transactions and the costs would spiral upwards.
As to our ongoing fees, as part of the rental agreement with the Landlord, we provide additional services. For example monthly invoicing and accounts reconciliation on rent – for foreign landlords we even have an obligation to HMRC. If a Landlord has chosen our Fully Managed Service, which is a fixed monthly charge (as a percentage of the rent) we also look after the property.
As a business we also have fixed costs including bank charges for lettings deposits, TDS membership fees, ARLA Membership fees and a charge per deposit we register. We have Professional indemnity insurance and Liability insurance for the business we run.
By removing the ability of Estate Agents to charge these fees, Applicants would face increased costs in using solicitors to draw up their short-hold tenancy agreements and Landlords would seek to increase their rent to cover additional charges billed to them.
This topic has been in the press a great deal recently as the Opposition was seeking to ban fees Estate Agents charged. Our applicants tell us that they would prefer a small charge and deal with a professional ARLA licensed agent than pay no fees, engage their own solicitor and deal with the landlord directly.