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tygar2

"Goodwill Fee" - is this legal?

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Hello everyone.

Just thought I'd pick your brains about a situation I'm helping deal with.

A friend found a flat to rent and the agent went through the process and charged her loads of fees for this, that and the other. (I know, should have waited a week but hey ho). Payslips, bills etc were submitted at the time and it was all good. She signed her form and paid what was listed as a GOODWILL FEE of £500. This was to be deducted from the total when she comes to pay the rent plus deposit so she was happy with that.

A day later the lettings agent called and said she would need a guarantor - not for bad credit, but because she earns under £28K. This was not mentioned before she signed and paid and requires a further £120 to process the guarantor (that's where I came in).

She has been told that if she cannot/won't find a guarantor or walks away then she would lose her £500 "goodwill fee". I asked her to send me images of every piece of paper she had and nowhere in the document she signed does it mention that the goodwill fee is non refundable. Also, and I think quite significantly, even if it was,  the total sum of their charges is less than the amount paid as a "Goodwill fee" - how can this be fair?

So basically they took her money then moved the goalposts to try and extract more money or get a free payday. I have included a picture of the charges page

Is this legal and what are the options. Their attitude is "deal with it"

 

thanks

letting.jpg

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The "goodwill fee" is a kind of holding deposit.  It's unwise to pay a holding deposit without some kind of written terms, otherwise you end up in the situation you and your friend find yourselves in.  

Normally, a holding deposit is returned if the tenant fails the referencing checks.  Your friend has clearly failed the reference, which is why they need a guarantor.  Your friend should now be able to walk away with the holding deposit. 

It's clear the goalposts were moved after your friend paid the holding deposit. I would expect your friend would be entitled to their money back, but it might take a big fight to get it.  They might have to go to a small claims court to get it.  It might be easier just to take the flat, if she likes it.  But personally I would be reluctant to be a guarantor with a company like that.

There is no easy solution for you and your friend.  It stinks.  For other readers, moral of the story, never ever, ever, pay a holding deposit to a letting agent without a written agreement.  Walk away, and find another place/agent.

Edited by lastlaugh

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So if you earn a little above the UK average (~£27.5k) you still require a guarantor? Is this a one bedroom flat?

Edited by spacedin

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3 hours ago, spacedin said:

So if you earn a little above the UK average (~£27.5k) you still require a guarantor? Is this a one bedroom flat?

2 Bed Flat in Basildon, Essex.

She is a nurse with with perfect credit but earns £25k basic before overtime/agency work.

Appalling that rents are so high that a professional now needs a guarantor to get a place to live.

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On 25/03/2017 at 5:02 PM, Lavalas said:

Absolute scumbags

'Goodwill' indeed. Feel free to post the name of the agent when this has reached a conclusion.

I most definitely will.

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On 25/03/2017 at 3:30 PM, lastlaugh said:

The "goodwill fee" is a kind of holding deposit.  It's unwise to pay a holding deposit without some kind of written terms, otherwise you end up in the situation you and your friend find yourselves in.  

Normally, a holding deposit is returned if the tenant fails the referencing checks.  Your friend has clearly failed the reference, which is why they need a guarantor.  Your friend should now be able to walk away with the holding deposit. 

It's clear the goalposts were moved after your friend paid the holding deposit. I would expect your friend would be entitled to their money back, but it might take a big fight to get it.  They might have to go to a small claims court to get it.  It might be easier just to take the flat, if she likes it.  But personally I would be reluctant to be a guarantor with a company like that.

There is no easy solution for you and your friend.  It stinks.  For other readers, moral of the story, never ever, ever, pay a holding deposit to a letting agent without a written agreement.  Walk away, and find another place/agent.

100% agree with you but I came into the picture after she had paid (she's a bit too trusting). 

They have made it clear to her that they will keep the £500 which is pure theft.

I was so appalled that I helped her locate another flat which happens to be cheaper as well.  I have every intention of chasing this up on her behalf and, out of principle, will even help her take it to court if I have to. Local press/consumer protection programmes will be notified as well - hopefully they will take it up.

Winds me up every time I look at it...look at those charges...inventory contribution?? And a random amount as a deposit...??

Thanks all. I'm on it.

 

 

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1 hour ago, lastlaugh said:

Good on you, then.

My first port of call would be the Property Ombudsman https://www.tpos.co.uk/

I've used them before, and they come down remarkebly hard on the type of sharp practice you describe.  And it's free to use.

Excellent. Thank you. Will be my first port of calll if asking nicely does not work out.

 

I cannot wait for this ban on fees to start. I know it might result in higher rents but greedy cowboys will be left with empty properties as their rents will be higher than the rest.

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1 hour ago, tygar2 said:

I cannot wait for this ban on fees to start. I know it might result in higher rents but greedy cowboys will be left with empty properties as their rents will be higher than the rest.

Even if these Herberts do add the fees onto a chunk of the rent it will be easier to compare against similar lets on the market.

Going to the Property Ombudsman as LastLaugh suggested is a good starting point. Good Luck!! Don't let the theiving b*st*rds get away with it.

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Hello everyone.

Just an update to conclude thread - sorry for delay.

So I went to their office with all documents to challenge them. At first they were all aggression and bravado saying they have no business talking to me and it's in t&cs blah blah. I informed them that I was representing my friend (who was present and confirmed) and that I would be recording the conversation going forward whether they responded or not. They said I couldn't do that and I said I could but they could choose to keep silent (winged it - no sure where I stood legally:P).

 

 With recorder on, I stated names, purpose of visit, who I was speaking to, date and time....at this point a "manager" came over and wanted to find out what was going on. I repeated prior statements and was about to go into detail when he said - "On this occasion only, as a sign of goodwill we will refund the fees."...yeah, whatever mate.

So good result in the end. Weirdly was a little disappointed as I was all fire up for a battle and had my speech ready....ah well :D.

 

Thanks everyone for your help.

 

 

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40 minutes ago, tygar2 said:

Hello everyone.

Just an update to conclude thread - sorry for delay.

So I went to their office with all documents to challenge them. At first they were all aggression and bravado saying they have no business talking to me and it's in t&cs blah blah. I informed them that I was representing my friend (who was present and confirmed) and that I would be recording the conversation going forward whether they responded or not. They said I couldn't do that and I said I could but they could choose to keep silent (winged it - no sure where I stood legally:P).

 

 With recorder on, I stated names, purpose of visit, who I was speaking to, date and time....at this point a "manager" came over and wanted to find out what was going on. I repeated prior statements and was about to go into detail when he said - "On this occasion only, as a sign of goodwill we will refund the fees."...yeah, whatever mate.

So good result in the end. Weirdly was a little disappointed as I was all fire up for a battle and had my speech ready....ah well :D.

 

Thanks everyone for your help.

 

 

Great news. 

Can you give the name of the agent??

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2 hours ago, Old Guy said:

Great news. 

Can you give the name of the agent??

 

2 minutes ago, satch said:

You can record conversations providing you tell them (covert recordings are not generally admissible), switch on the device and tell them that the conversation is being recorded .....

Good to know I did it correct especially as I made it up on the spot!

Regarding the name, can someone confirm it is advisable to reveal or not? They are located in Basildon, Essex. I'm guessing many agents pull various underhand stunts like this so not specific to this particular one who to their credit did back down and refund.

Besides this case, information and advice from this website saved me from making a poor purchase decision 4 months ago - Knowledge is your weapon.

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1 hour ago, tygar2 said:

 

Good to know I did it correct especially as I made it up on the spot!

Regarding the name, can someone confirm it is advisable to reveal or not? They are located in Basildon, Essex. I'm guessing many agents pull various underhand stunts like this so not specific to this particular one who to their credit did back down and refund.

Besides this case, information and advice from this website saved me from making a poor purchase decision 4 months ago - Knowledge is your weapon.

Possibly not, it was only mild curiosity. Well done anyway.

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