Letting Agent Deducting Commission from Deposit Refund

Letting Agent Deducting Commission from Deposit Refund

14:21 PM, 21st May 2014, About 10 years ago 14

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Hi Readers,

My previous tenant vacated the property leaving £787 in rent arrears. The secure deposit which the letting agent lodged in their own name is for £625. The agent has identified £193 worth of repairs that need carrying out as a result of damage by the tenant.

Whilst the tenant has agreed to the £625 deposit being used to reduce the arrears, they have not as yet agreed to the £193 repair costs.

The letting agent has informed me that they can only refund £432 (625-193) as they have to retain the repair costs. I would have been happier to receive all the deposit back, especially as the tenant has already agreed to this and then carry out the repairs myself.

Now the agent is saying they will be deducting their 10% commission from the £432 refunded. Surely as the commission is payable on rent collected this should not be the case. On 2 previous occasions were I have had tenants leave in arrears the letting agents on those occasions returned the value of the arrears from the deposit in full without deducting commission.

Does anyone know the legality of this?


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Simon Topple

16:16 PM, 21st May 2014, About 10 years ago

There may be implications if you charge a large fee (eg "deposit" sized fee) - see http://www.landlordlawblog.co.uk/2012/02/09/five-premium-tenancy-questions-answered/

Alan Loughlin

16:23 PM, 21st May 2014, About 10 years ago

no we do not, it is 295.00 for a one bed apartment so only half a months rent, and it is clear what it is, it clearly stated non refundable, with these there is a relatively high turnover of tenants and they only cost 400 pound to decorate and clean, so we have a reserve of money to do it, and if a washer or something is needed the cash is there, costs us nothing.

Michael Barnes

16:26 PM, 21st May 2014, About 10 years ago

I don't know about the legality of 10% of deposit that is used for rent. I would guess that it is reasonable. The fact that it came from the deposit and not from a specific payment doesn't alter what you get (except for the rens shortfall).

It appears that the agent is working in your interests in applying his view of the Ts and Cs of tour agreement: Taking the repair costs out of the money means he is not charging 10% on that amount.

Robert Pais

10:12 AM, 22nd May 2014, About 10 years ago

Reply to the comment left by "Romain " at "21/05/2014 - 15:51":

Hi Romain

Absolutely, the terms state that the commission is due on rent collected. I asked them for clarification and they said that in effect they are still managing the property as they are negotiating over the arrears. Probably correct although if they had managed it correctly during the term of the tenancy we wouldn't be in this position now.
Anyway I've accepted that I will have to pay the commission. I spoke to another letting agent I know quite well and who didn't charge me previously in a similar situation. His response was that if they provided a bad tenant then they did not feel comfortable charging commission on deposit returns when the problems were partly of their making - I guess it is down to the individual letting agent.

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