You may or may not be aware of changes in legislation that the government are imposing on letting agents and landlords in effective 1st June 2019. Until now, we have charged tenants certain administration fees at the start of a tenancy to cover our associated costs when referencing them and producing ‘move in’ paperwork. Charging this has also ensured we have a strong gesture of intent to let the property at the outset from the tenant. Our fees have always been refunded to applicants who are not accepted for a property, unlike some of our competitors.
The new legislation prevents agents and landlords from doing the following:
- Asking tenants for more than 5 weeks rent as a deposit.
- Charging any fees associated with renting a property other than rent or deposit.
There are however some exceptions and we can;
- Charge tenants up to £50.00 for adding to, renewing or amending a tenancy agreement.
- Charge for replacement keys and call outs to allow access to their property when locked out.
- Charge a 1 week holding deposit on application from the tenant, this must be deducted from the first months rent when paid or returned within 14 days.
- Charge to attend out of hours for lost keys
Thus far we have never charged tenants for any of these but we will be forced to going forward.
The instant reaction from agents was that landlords will be forced to increase rents to cover increased costs from agents. This is not likely to happen as it didn’t in Scotland when this was introduced there and generally the market dictates the rental value of a property - not a landlord or agent.
We have looked at various ways to continue offering our first class service whilst needing to recovering some of our losses. Our main way will be by increasing our fees to future clients who may wish to use our services by introducing a whole new way of charging but this won’t affect you.
How will things change for you?
Reluctantly we will need to introduce a letting charge to landlords of £125.00+VAT payable when a tenant is found, referenced and moved in, which I know the majority of our competitors already charged, even before the fee ban was introduced.
What can you do?
We recommend that our clients should aim to recover this cost by being much more ruthless post tenancy in charging for works that need to be carried out which they may have put down to wear and tear in the past. We will help you to do that by carrying out our detailed pre and post tenancy inspections and making recommendations. These deductions can then be made from a tenants deposit. The legal maximum you will be able to charge for a deposit is 5 weeks rent and we will be asking this as standard across all managed properties.
I sincerely hope you understand and appreciate our reasons for having to do this. We feel aggrieved as a company which has always prided ourselves on being fair with our charges to tenants to now be punished because of others in our industry who are not.
I would like to use this opportunity to clarify any charges associated with managing your property which take effect from 16th January 2019, if should you prefer to use your own contractors we will happily liaise with them and arrange the required access to your property.
- Deposit Registration and release: £40.00+VAT (Included under full management)
- Annual Gas Safety Certificate: £50.00+VAT
- Smoke alarms and Carbon monoxide alarms supplied and installed: First alarm £40.00+VAT Units thereafter: £14.00+VAT
- Electrical Safety Test (EICR Test): £140.00+VAT
- EPC: £60.00+VAT
- Ultra Lets employed tradespeople will be charged at £18.50+VAT p/h + Materials
- Organisation of property maintenance: 10%+VAT of the invoice (Subject to a minimum of £10.00+VAT and a maximum of £50.00+VAT per job)
- Full refurbishment project management: 10%+VAT of total quote.
- Reinstating utilities at a property £30.00+VAT per utility + Cost of credit on prepayment meters (If required)
- Arrangement and submission of paperwork relating to a HMO licence including floorplans to the local authority: £400.00+VAT
- Property floor plans £100.00+VAT
- Service of section 13 notice to increase rent £30.00+VAT
- Service of section 21 notice to regain possession £60.00+VAT
Charges to Tenants
- Key deposits: £10.00+VAT per key (To be collected from the office with 2 hours notice)
- Attending to give access to a property (24Hrs): £30.00+VAT (Payable on attendance)
- Adding to, amending or renewing a tenancy agreement: £40.00+VAT
- Application holding deposit: Equivalent to 1 weeks rent held for up to 14 days and deducted from first months rent paid upon move in.
- 5 week deposit payable in addition to first months rent payable on move in.
All proposed prices are subjectto VAT unless stated otherwise at the current rate.
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