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crazypabs

Question regarding tenant fee ban

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My wife and I want to move into a different rental property which we have seen and think is a suitable place.

The letting agent has fees of approximately 700.

My question is:

If we agree to move in today we are liable for the fees. However if we move in on 1june when the ban comes into play are we still liable to pay the fees?

I was under the impression that if an ast begins on or after 1jun then fees are not due.

 

Thanks

Edited by crazypabs

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I'd try MSE for an answer on this. But crikey - 700 is an insane amount. 

Anecdotally I know someone who negotiated a 50% discount on the fees for signing before the cut off. 

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21 minutes ago, PeanutButter said:

Anecdotally I know someone who negotiated a 50% discount on the fees for signing before the cut off. 

Wow.

Doesn't leave the estate agent with any scope to argue that the original price of those fees wasn't extortionate in the 1st place.

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4 hours ago, crazypabs said:

I was under the impression that if an ast begins on or after 1jun then fees are not due.

I think the fees are for services rendered (allegedly anyway) ahead of the AST starting, though.

So they are not currently banned from charging you for doing something for you today.

I am not a lawyer.

Unless they do the identity search (or whatever alleged work that needs to be done) on the day the AST starts? Not sure they would do that anyway.

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14 hours ago, SOLZHENITSYN said:

We just took out a new rental, tenancy to start 15th June. Agents have already ran credit check, referencing and sent us a contract to sign. They have charged no fees.

May I ask - does this mean you were charged nothing at all for the process? (aside from the deposit protection amount, and the 1month rent in advance)

If so this is great news & presumably they charged the credit check and contract to the LL... I thought I read somewhere that "reasonable cost" of credit check and contract (e.g. reasonable cost of £4 and £20 respectively) might still be billable to tenant

Thanks

 

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32 minutes ago, BearlyBegun said:

May I ask - does this mean you were charged nothing at all for the process? (aside from the deposit protection amount, and the 1month rent in advance)

If so this is great news & presumably they charged the credit check and contract to the LL... I thought I read somewhere that "reasonable cost" of credit check and contract (e.g. reasonable cost of £4 and £20 respectively) might still be billable to tenant

Thanks

 

EAs were only ever legally allowed to bil time and costs i.e. 1h of an admin assistant and the credit check fees.

This would come to about ~£100,.

EAs took the absolute p1ss and were charging several £100s.

The fee ban is a direct result of their greed.

 

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2 hours ago, BearlyBegun said:

May I ask - does this mean you were charged nothing at all for the process? (aside from the deposit protection amount, and the 1month rent in advance)

If so this is great news & presumably they charged the credit check and contract to the LL... I thought I read somewhere that "reasonable cost" of credit check and contract (e.g. reasonable cost of £4 and £20 respectively) might still be billable to tenant

Thanks

 

I think it's a blanket ban on fees for tenants, the government know that letting agents are scumbags and if they leave any sort of 'reasonable cost' loophole letting agents will discover they have an extremely flexible definition of 'reasonable'.

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7 minutes ago, the_duke_of_hazzard said:

What if you've signed a contract that has fees in it payable eg on extension?

Applies to new contracts from June 2019 and all contracts from June 2020. There is the period between now and next June where unreasonable fees (such as renewal) could be charged to existing contracts unfortunately. The late start for existing contracts appears to be for allowing new contracts to be issued, as ASTs are rarely longer than 1 year, but after June 2020 there really is no excuse to charge tenants anything even if they're still on the same contract / periodic that was signed prior to June 2019.

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Five years ago I told the agent letting my house that I wasn't paying his fee because it was unreasonable.  The response was 'so what do you think is reasonable?' - so I looked around for the lowest fee in the market and gave them that...I can't remember what it was but it wasn't  much.  All depends on the market, clearly in my case he didn't have many others interested.  If there are queues of would be tenants and a shortage of homes to rent then they will charge what they can...the letting fee ban won't make any different to what tenants have to pay - the market decides this - and fees will be passed to landlord who will pass to tenants as rent - if the market can support it.  In the end we will pay the same one way or another - the market rate.

 

 

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12 minutes ago, Dorkins said:

I think it's a blanket ban on fees for tenants, the government know that letting agents are scumbags and if they leave any sort of 'reasonable cost' loophole letting agents will discover they have an extremely flexible definition of 'reasonable'.

Too right they would, the scumbags ... great! 

https://england.shelter.org.uk/housing_advice/private_renting/letting_agent_fees_for_tenants

 

The tenant fees ban from 1 June 2019
From 1 June 2019 all upfront fees for tenants will be banned.

What you can’t be asked to pay
If you sign a new tenancy or renew your tenancy after 1 June, you can’t be asked to pay for:
• referencing
• credit and immigration checks
• administration
• renewing your contract

What you can still be asked to pay
The only fees that you can be charged will be:
• for the cost of replacing a key if you lose one
• if you are more than 14 days late with your rent
• if you want to change your tenancy or bring it to an end

 

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1 minute ago, BearlyBegun said:

What you can still be asked to pay

...Rent

These costs will simply be passed through as rent if the market supports it.  In total we will pay the same in the end - the market rate.

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12 minutes ago, Wayward said:

...Rent

These costs will simply be passed through as rent if the market supports it.  In total we will pay the same in the end - the market rate.

Not really, it means the stakeholders relationships are changing. The transaction costs of switching house is now on the LL and not on the tenant.

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34 minutes ago, the_duke_of_hazzard said:

What if you've signed a contract that has fees in it payable eg on extension?

Presumably that would be an unfair term and not enforceable as it contravenes statute. You cannot sign your statutory rights away.

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29 minutes ago, Wayward said:

the letting fee ban won't make any different to what tenants have to pay - the market decides this - and fees will be passed to landlord who will pass to tenants as rent - if the market can support it.  In the end we will pay the same one way or another - the market rate.

I think you can argue that there hasn't really been an efficient market in letting costs before now as landlords choose the agent and tenants pay (at least part of) the fees. Now that the person making the purchasing decision for the letting process also pays the price of completing that letting process the market should operate more competitively/efficiently and presumably the cost of letting should fall.

Difficult to say who will capture the surplus that is no longer going to the letting agent. I guess it will probably go partly to the landlord and partly to the tenant, just like a consumption tax cut is usually shared between producer and consumer.

Edited by Dorkins

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1 minute ago, Dorkins said:

I think you can argue that there hasn't really been an efficient market in letting costs before now as landlords choose the agent and tenants pay (at least part of) the fees. Now that the person making the purchasing decision for the letting process also pays the price of completing that letting process the market should operate more competitively/efficiently and presumably the cost of letting should fall.

Yes, the letting agents charged ripoff rates as the tenant didn't have any choice if they wanted the home. Landlords can easily shop around, which ends the rip off fees. Competition should very much lower the market rate for fees.

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I always found it amazing that as home purchase transactions fell estate+letting agents said they were making up the difference from increased lettings despite the much larger size of the owner occupied sector and private tenants being less affluent. Appalling situation.

Edited by Dorkins

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2 hours ago, mattyboy1973 said:

I'd love to see the breakdown of that £700 if they provide one.

 

PCP on flashy Mercedes: £696

Credit check £4.

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Just paid nearly £500 in fees on a new rental... Extortionate but we really wanted the house. A few days after moving in we received a big bunch of flowers and a pack of personalised 'We've moved' cards from the EA...! I'd have rather not got the freebies and paid less in fees!

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3 hours ago, GettingBored said:

Just paid nearly £500 in fees on a new rental... Extortionate but we really wanted the house. A few days after moving in we received a big bunch of flowers and a pack of personalised 'We've moved' cards from the EA...! I'd have rather not got the freebies and paid less in fees!

Flowers were from a local company ("friend" of the EA?) ...?

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21 hours ago, BearlyBegun said:

May I ask - does this mean you were charged nothing at all for the process? (aside from the deposit protection amount, and the 1month rent in advance)

If so this is great news & presumably they charged the credit check and contract to the LL... I thought I read somewhere that "reasonable cost" of credit check and contract (e.g. reasonable cost of £4 and £20 respectively) might still be billable to tenant

Thanks

 

We were charged nothing at all.

just put down a holding deposit of 1 weeks rent which was then offset against our full deposit (if 5 weeks rent).

no referencing fees etc or any other fee.

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