Here’s Why This Letting Agent Might Have To Stop Bucking The Trend

There has been a lot of publicity lately on the subject of the fees that many letting agents charge prospective tenants.

Some agents appear to charge tenants a fee (variously called an administration fee, a tenancy fee, a referencing fee, or …er… a fee) which is payable up front, regardless of whether or not the tenancy actually goes ahead.

“Boo, hiss” I hear you cry. And, I would agree with you.

As a letting agent, I have been feeling pretty smug about the fact that when someone wants to rent one of the properties we are marketing, we ask them to pay £200. But it’s not a fee. It’s fully returnable in the event that the tenancy doesn’t go ahead; and if the tenancy does start we will put that money towards the amount required for the dilapidations deposit.

In addition to this, if the tenancy does go ahead, we charge a fee, the level of which is clearly set out in all of our literature and which – to date – not one tenant has ever complained about. In fact, to the contrary, we have actually been told by hopeful tenants-to-be that they really hope we can find them a property because they think the way we operate is so reasonable.

But, lately, there seems to have been something in the air. And I don’t like it.

During the month of March and the early part of April, we endured more prospective tenants changing their minds at the last minute than in the last five years put together!

And it’s worse than that.

One couple changed their mind about renting the property just two days before they were due to move in, and that was after (a) feeding us a major sob story on how they’d been let down on another property and how upset they would be if it happened again, and (b) allowing the owners of the property to make, at their own expense, changes to the staircase to make it safer for their two-year-old child.

Then, there was the international corporate lady: a week before she was due to move in (which should have happened yesterday), and after all the referencing had been carried out, she visited the property and came up with a totally unnecessary list of jobs that she wanted to be carried out before the move-in date. Our client moved Heaven & Earth to fulfill all of her requirements, only for her to change her mind on Monday!

There were others, too, sadly.

Disappointingly, with just one exception, all the people concerned expected to receive their deposit back. In full.

I have to be honest, this situation has created another dent in my faith in human nature. Surely you can see that donating the money to the out-of-pocket landlord would be appropriate? Um… no. Clearly not.

So, folks, I’m really sorry to say it, but we have to seriously consider changing our stance on fees. For the sake of our clients.

Should we perhaps change the rule so that the £200 deposit we ask for would become non-returnable in the event the prospective tenant withdraws their interest in the property, for any reason at all? This deposit could then be given to the landlord to compensate them (a) for showing good faith in taking the property off the market while referencing takes place, (b) to cover the lost rent that results and (c) to recompense them for any expenditure they have incurred in making changes to the property.

I’d be very interested to hear your opinion.