Letting agent possibly pulling a fast one over rent increase?

by Readers Question

23:27 PM, 7th March 2013
About 6 years ago

Letting agent possibly pulling a fast one over rent increase?

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Letting agent possibly pulling a fast one over rent increase?

Readers QuestionWe have been renting out our property through a letting agent for the past 2 years.

The rent was £330 and the agent  takes 10%.

Our previous tenant left in November. I saw our flat advertised for £360.

Can our letting agent do this without letting us know about the increase?

We are still getting the same £297(after deductions).

Also, should we be given a copy of the new tenant’s tenancy agreement? 



Comments

9:38 AM, 8th March 2013
About 6 years ago

As far as I am aware and I'm sure others will verify (or not), even when having an agent act on your behalf you are still responsible for ensuring everything is in place, correct and legal. Although the agen is bound by regulations set out by the legal body they are a member of (ARLA etc).

So I would say yes you should ask for a copy of the tenancy agreement and at least have a quick check of it when you have the time. Along with verification of the deposit protection scheme and any other relevant docs.

I don't think the problem here is that they have increased the rent (as long as they have got you a tenant then great?!) but that the extra income hasn't been passed on? Give them an email and ask!

When doing your tax return you are required to declare all your income which is £360PCM at the new rent and the agency fee's simply get submitted as an expense.

If your paying 10% you should be receiving £324 from your letting agent, minus any legitimate costs you have authorised (repairs etc).

It sounds to me like you are not paying 10% at all and if your information is accurate, receiving £297 at a rental income of £360 means you are paying 17.5% management fee's!

If I were you I would be looking into this and checking everything, then proceeding to make a complaint in the first instance to the agent.

Hope this helps and I'm sure others will have more information that will help.

Paul

Emma Reid

11:59 AM, 8th March 2013
About 6 years ago

You will need to make sure you get all the facts correct first. It could possibly be that the agent advertised the property at the higher price in order to allow the tenant to negotiate the price down to £330. It is a bit of a naughty tactic, but some agents practice this way.
Getting a copy of the tenancy agreement will clear this up as it will have the rental price on it - they do have to supply you with a copy of it if you request one.
If they have been charging the higher rent & not passing it on to you then I think I would be asking them for the money to be reimbursed & then change agents. If they refuse to give you the money back, tell them you will take you copy of the tenancy agreement, management agreement & accounts to the local newspaper - the threat of bad publicity in the local area will probably be enough for them to back down.

Mark Alexander

12:17 PM, 8th March 2013
About 6 years ago

Good advice Emma, I would also ask for a copy of the deposit protection certificate

22:52 PM, 8th March 2013
About 6 years ago

Just a quick observation, you also need to consider vat. If you are paying 10%+vat then that is 12% so consider this when checking your figures.

Industry Observer

10:18 AM, 9th March 2013
About 6 years ago

If the agent collects £330 and deducts 10% then there is no VAT just a £33 deduction. It could work mathematically with VAT that that is extremely unlikely and I would guess thisd is a smaller agent not VAT registered.

The whole issue here is the extra money - at 10% they should be paying you £324 if, as has been commented, they did indeed get £360 a month.

You need to change agent though. If they are not giving you copy documents, unless you ask them not to (don't do that) then you need a better agent, possibly at a 12% fee

Matthew Dickinson

11:05 AM, 9th March 2013
About 6 years ago

The best thing is to find an agent that is trustworthy! I have tried several in Newark, Nottinghamshire and have either been stung by over the top repair bills or have not received payment when a house was occupied. Now before you say I should have checked, I am disabled and have limited mobility, and am now in sheltered accomodation, so was unable to check. As soon as I asked my carer to ring about the house, which I thought was empty, I found that it was occupied. I have now changed agents to Martin and Co. and my problems ended! The house mentioned was one modified for me, but I became too disabled.

Matthew Dickinson

11:14 AM, 9th March 2013
About 6 years ago

As regards to the increase in rent, then ask the agent, as he is in control, and I would imagine that it is not in his interest to overprice your property. As soon as it is let, then you should expect an increase, and if it is not forthcoming then confront your agent.

Don Holmes

11:17 AM, 9th March 2013
About 6 years ago

The Agent PERSPECTIVE
First of all lets not all immaterially think the worse of the agent there may be many reasons for the tactic if indeed it is a tactic, It may even be a different flat in the same block I have a couple pretty identical from a marketing view?

But also remember we the agent have a duty of care to all parties tenant, landlord and of course our selves, so if their is something untoward and surly knowing the LL will see the advert it is pretty stupid of them and certainly no DOC being taken there.

In relation to tactic, I must say the comment regarding inflating the asking price being "bit of a naughty tactic" is a naive point of view! negotiation is an international tactic and one the agent has a duty to perform to achieve best price and by no means illegal..

All the other legal issues seem to have been covered, such as get a copy of the tenancy agreement and deposit protection certificate, Our I have another idea telephone your agent and ask!

Industry Observer

11:58 AM, 9th March 2013
About 6 years ago

Agent can only ever have one master, Duty of Care as defined at LAW is owed only to Landlord.

In terms of the tenant the agent has a duty or RESPONSIBILITY but at LAW it is a totally different concept, mainly revolving around safety at the property plus other issues.

14:31 PM, 9th March 2013
About 6 years ago

@ Industry Observer. I was merely suggesting to take note of the possibility of vat affecting the calculations. None of us know - because it has not been stated - the size of the agent or whether vat applies or not.

As for duty of care, the Agent is the Agent for the Landlord and so is fulfilling the Landlords duty of care to the Tenant. If they fail to do so they are subject to penalties as well.

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