Harringay, Haringey - So Good they Spelt it Twice!
Letting Fees to be banned!
Apparently the Chancellor's Autumn statement will include the outright banning of letting fees. Given what they are used for, to buy insurance to cover rental payments, I think that estate agents should consider themselves lucky there is not some PPI style claw back as there was with high street banks doing the same.
Tags for Forum Posts: letting, letting fees
Replies to This Discussion
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Permalink Reply by Charlotte A on
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How do you know he had rental payment insurance? It's not compulsory. The landlord sounds like a total tool who probably doesn't and I would also imagine that insurance companies have clauses that mean that if the tenants move out because the property is uninhabitable, then they don't pay. And if Katie managed to move out without having to pay the first 6 months' rent in full (which is normally the compulsory part of the rental agreement) then it suggests that the landlord and agent agreed that they had cause to move out.
By the way, I think the letting fees are a total scam, especially when they're charged because you're extending your contract and the agent is doing literally nothing except changing some dates on a Word document for £200.
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Permalink Reply by John McMullan on
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The fees give the letting agent a lot of power and make you think twice about breaking the contract after 6 months. I have researched the insurance and the certificates a lot and posted links on here to what I have found, you are welcome to do your own research. I don't mind being asked how I "know" as some of it is surmising but when you jump on me for this and yet feel free to add "I would also imagine that insurance companies have clauses that mean that if the tenants move out because the property is uninhabitable, then they don't pay" I'm afraid I roll my eyes. Please look into this yourself. It's a scam, up there with PPI and it's why the government, a Tory government, have done something about it.
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None of the links you posted prove that agents charge a fee to tenants in order to use that fee expressly to buy rental payment insurance for landlords. They may well show that Endsleigh offer rental payment insurance in addition to the standard landlord insurance, and they offer a reference checking service but how do those things prove that the fees are used to buy that insurance?
All insurance policies have non-payment clauses, landlords insurance policies for example, often don't pay out if you discover your house has been turned into a cannabis factory by your tenants, and destroyed. Landlords rental income insurance is to cover you when your tenants go into rent arrears. Endsleigh don't provide the small print, but I would imagine that if the reason the tenants aren't paying is because they moved out because the house fell down, you probably wouldn't be able to claim because you had caused the problem yourself.
It's a scam because the agents are overcharging tenants for doing almost nothing, and for services they're doing on behalf of their client, the landlord, who should be paying. Where is your evidence that the reason the government is doing this (something they nicked from Ed Miliband's 2015 Labour manifesto) because the fees are being used to illegally buy insurance?
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You just try negotiating on the fee or telling them you've already moved in and see how they react. The requirements for the insurance are the things that they definitely won't move on.
Sorry, I've posted other links in other discussions on this too.
Overcharging is not a scam, opaquely charging someone for insuring their own payments to you is. PPI is a very clear example of this.
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But it is possible to negotiate on fees. One letting agent was so desperate to let out a sub-standard flat to us that they eventually rang and said they had got rid of the fees.
At the time I assumed that that was because the fees weren't actually paying for anything.
I always negotiate on fees because they are nonsense and have always been given a lower figure.
Perhaps that was your point though. I'm a bit confused by all this insurance stuff!
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Do you mean that the things they won't budge on are the deposit, first month's rent upfront and reference checks, because those things are required for landlord insurance? Would you rent your property to someone without any background checks to prove they could a) afford to pay the rent and b) were likely to actually pay it?
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Oh yeah you still have to pay the deposit and the month's rent but the extra 'admin' fees of between £200-£500 (in my experience) include the referencing check which I can't believe cost that much, even if they do pay a professional referencing service.
The fact that they lower/waive their 'admin' fees to rent a property indicated to me that they either don't do an awful lot of referencing (ie my Kings example) or they just add on however much they like to the amount they get charged by the referencing service.
I don't have a problem with landlords wanting some sort of guarantee that they will get their rent. But they should pay for that. Landlords know the risks they are taking on when choosing to be landlords. Besides, when you go through a private landlord (much harder to find), they don't charge these fees for background checks. Or they are minimal.
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I was directing my question at John rather than you, and his claims that the fees are all some kind of illegal insurance scam! They just charge what they can convince people to pay, and people are so desperate to find somewhere to live they pay it.
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Look at the requirements for the landlord insurance:
Bringing up the usual HoL Straw Man argument of "well would you do no checks at all" against the "it is WRONG to charge the tenant for them" is depressing. I was so cock-a-hoop happy yesterday for all the country's put-upon renters who seemed to have no political representation amongst a parliament full of landlords and stupidly thought that others would feel the same.
If you're calling me out on my slight leap of intuition between how I've seen tenants treated by estate agents, the (go on, google it) copious number of insurers offering this insurance and the requirements for it, and the government's deposit protection scheme then fair enough.
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Oh I'm not sure he did have it. In fairness to kings they demanded that the landlord give us our deposit back but we still lost a month's rent of £1100 and move costs.
He didn't give us a gas safety certificate nor did he put our deposit in a government protection scheme.
He was not of sound mind, from experience I'm almost certain he had dementia and should not have been taken on as a client. But they saw pound signs and did not care that he was not fit to hold a position of responsibility.
The thing is we are relatively lucky because we have the social capital to know how to talk to letting agents and get advice from charities and solicitors. People who do not have those support networks or who speak little English are much worse off
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Permalink Reply by matt on
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It's incredible the number of so called letting companies that pop up around here (that never last very long) but have relied on this scam of charging tenants 'fees' for practically nout. If this announcement does get enacted expect to see a lot of these scam companies go bust!
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Permalink Reply by Finsbury Park Ranger on
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The truth is properties were being mis-advertised. Stealth fee's were dumped on the renter last minute. Hidden costs make a market place's messy. They stop people being able to easily assess what the best deal is.
It's a good move. More of this would be welcome.
Let's stop insurance, electrify, gas, credit and mortgage companies offering 'introductory rates' with any hidden fee's.
Life's too short for that nonsense.
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