A property finding agent who specialises in the rental market has called for letting firms to stop charging fees to tenants immediately.
Tony Coe, founder of London-based Saunders 1865, said agents should ‘cease and desist’ ahead of the ban.
Coe described the fees as a “form of extortion”.
He said: “At long last, after a long campaign supported by Saunders 1865, its corporate clients and our renter community, finally the Government has started the process to introduce the long-awaited legal ban.
“These so-called admin fees line letting agents’ pockets without providing any service of value to renters.
“They are, in reality, a surcharge (on top of the commission that the agent is charging to their client landlord) for minor administrative tasks that benefit the landlord.
“But tenants are forced to pay them or they won’t get to rent the home they’ve chosen – nor any rental home.
“They are, therefore, a form of extortion plain and simple, which is why we headlined our campaign with the slogan No Fees For Keys.”
Coe added: “When I started out in the relocation business 30-odd years ago acting for tenants throughout the renting process, these admin fees were small and of little consequence.
“But landlords’ agents have increased them substantially over recent years because they’ve recognised that tenants have no choice but to pay them. And they now can amount to the better part of a thousand pounds.
“Reputable letting agents that we work with have already stopped charging these fees to Saunders 1865 tenants.
“Now that the legal ban is close to becoming law, I encourage all letting agents to cease and desist charging these fees immediately rather than waiting for the new law to officially come into force. It’s the right thing to do.”
And how do you make your money Tony Coe? Oh you charge fees to tenants. So a tenant renting through you pays your fee which dwarfs a letting agents admin fee. What value do you add? You look on Rightmove and Zoopla. Or if you can’t be bothered to even do that you contact the head office corporate relo teams at Savills, Knight Frank etc who farm your enquiry out to its branches. Good plug for your company here but do us all a favour and cease and disist.
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Plenty of us agents have never moved away from “admin fees … small and of little consequence”. Relocation agents have a huge choice of agents to use. Many of our tenants have never paid fees…Nice self-promo though!
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Charge the relocation company a fee to let to one of there clients
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Surely Tony Coe will be out of business next year along with all relocation agents. The draft bill states (not word for word) that no fees can be charged to tenants or third parties. With PR led stories like yours Tony your clients will now surely realise they can search for properties themselves, they can sign a tenancy agreement themselves and I urge them to stop using you TODAY! Do the right thing apologise for the 30 years you ripped them off and on that note – are you charging the same fee today as you did 30 years ago?
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Actually, the draft doesn’t say that at all. A tenant can be charged a fee, but they cannot be compelled to pay a fee upon which the grant of a tenancy is contingent. The can, for example, choose to pay for a deposit replacement product or policy rather than pay a security deposit. They can choose to pay a third party for a service, but cannot be required to do so.
If relocation Agents require a fee otherwise the let cannot proceed, then it could be a prohibited fee under the current draft unless it is allowed because the tenant has a choice as to whether they use such a service or not
I suppose that’s why they draft a bill for review by a select committee
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“Prohibitions Applying to Letting Agents.
(2) A letting agent must not require a relevant person to make a prohibited payment to a third party as a condition of arranging the grant, renewal or continuance of such a tenancy.
(3)A letting agent must not require a relevant person to enter into a contract for services with a third party as a condition of arranging the grant, renewal or continuance of such a tenancy.”
I fully agree with your views towards relocation agents (unless it is a company that the tenant works for helping to arrange it when they are being relocated for work) but I’m not sure if a relocation would fall under these clauses. I agree that it should, as basically a relocation agent is a fancier term for letting agent that doesn’t have a ‘patch’ or advertise properties themselves!
Maybe something that we should bring to the attention of the draft writers?
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More company’s advertising their own services!
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Firstly this is only draft and lots of people considering it will help make it work.
Secondly, it is a prohibition for an agent to charge a fee to a tenant (sec 2(1)) even if they work for the tenant (Sec 19(2)(b)) that is conditional on the grant, renewal or continuance (sec 2(1) -(4)). It would appear that this could prevent relocation agents charging individuals fees, if the fee is linked to the grant, continuance or renewal of a tenancy (tenancy is only an assured shorthold or licence so tenant fees can, according to the draft, still be charged for company lets (sec 20(1)). (You can hear the creative brains whirring!)
If a relocation agent charges the client “regardless” of finding or agreeing a tenancy, then it would appear to fail the definition of “as a condition of arranging the grant, renewal or continuance of a tenancy”. Again the creative brains whirr but be mindful of the Accommodation Agencies Act 1953 provisions on charging.
Whilst we have not fully digested this draft, we would expect changes before it is passed and so the statements above may not remain true after implementation.
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What will be interesting is where some managing agents charge a fee to a new agent to provide a reference for the outgoing tenant. Who will pay that fee or will such a fee be prohibited as if not, I can see them spiraling upwards.
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Interesting point. The question will be is the last agent acting “on behalf” of the tenant? You can see the argument. We have a similar query about can you charge a guarantor for referencing as are they acting on behalf of the tenant or not? the jury is out on both and some clarity in the legislation would save everyone some hassle.
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David – just my two penneth, but I believe use of the words ‘relevant person’ rather than ‘tenant’ implies that it will prevent agents from charging guarantors fees especially where a guarantor is required to grant the tenancy.
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Got to be honest- always despised that little cherub. Thankfully come across it very rarely but uuuurgh!
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Tony Coe I suggest you contact me with immediate effect so you can come and spend a week in my branch and see why we charge fees to tenants. Let see how my overheads of £25,000 are chipped away at.
davidvotta@hotmail.co.uk
Why not tie two ands behind our backs and say “letting agents adhere to enforced and ever changing legislation and whilst that’s happening your not allowed to charge for your services rendered”
” when I started out in the relocation business 30 odd years ago these fees were small and of little consequence” it’s a shame you didn’t start out as a letting agent 30 odd years ago then you may have some knowledge on the business and tell the law has changed drastically.
How about I write an article on my experience with relocation agents? Perhaps I should say they are stuck up, pointless time wasting failed estate agents. But I won’t say that because I’m sure there are good Relo agents out there that deserve to charge a fee to relocate people. Too much generalising going on and this is why this whole fee ban situation has come about in the first place.
When this ban comes into force and a tenant comes to me for specialist advice on their property or their contract or when they are due to vacate the premises or what they should do regarding a dispute with the landlord or deposit I’m afraid I will not be able to act for them nor answer any of the questions because they’re not paying a fee and do not get a service from me. I’ll be too busy focusing my attention on paying customers and making up the thousands of pounds a month deficit the fee ban will bring to my business in order to keep my head above water and put food on my plate for my family. What will tenants do then? use Google as their advisor or the citizens advice bureau? Well that worked beautifully in the past hasn’t it what with the advice on withholding rent if the landlord is not maintaining their obligation. Spectacular advice for any tenant that wants to be referenced for a property through a reputable agent and the question that comes up on a reference request of “was mr tenants rent paid on time” and the answer is no, sorry Mr Tenant that’s a failed reference there, you don’t get the property.
Do you think because I read Oliver Twist I know a thing about how it feels to be an orphan???
do you think because I watched saving private Ryan I have any idea on what it’s like to go to war???
Short sighted, narrow minded and uneducated would be an understatement and me holding back
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David whilst I applaud your passion we must always tread carefully when pleading our case. Whilst compliance has increased dramatically over the last decade (and will continue to do so)- the majority of this compliance relates to landlord obligations and therefore cannot be pinned at a tenants door.
What is more, whilst what we must do escalates, so does the tech environment that can facilitate this offsetting much (if not, one day, all) leg work.
Where we used to manually draft each and every tenancy document- these can now be created literally at the click of a button. Where we used to have to post & chase paperwork and possibly resolve missing/incorrect completion- we can now have multiple parties, in multiple locations sign contracts instantly on any internet enabled device. Where tenant references used to always cost around £30 per person there are now many options around £10 (we use one that charges £8)- and if your landlord want insurance/warranties many now reference for free on such products.
If your tenants regularly ask questions about your tenancy docs then the real question should be- how do we make these clearer & eliminate this? If your tenant is unhappy surely better to ask why & possibly resolve than simply pass to a 3rd party and risk escalation. After all- you or your landlord might be at fault.
There is no question that the fee ban will make challenging times for agents but we have known this was coming for over a year. If this genuinely threatens your business I have to ask: why haven’t you been seeking solutions to minimise & offset this impact over the last 12 months. The old adage always sees you good: hope for the best, plan for the worst.
In modernising your business and processes you not only become a more lean & efficient business but you also deliver a modern experience to tenants and landlords alike- and that can’t be bad. Never forget- most tenants aren’t tenants forever, most make it on to the property ladder and many go on to become landlords. When you work with tenants you get the opportunity to capture them at the start of their property journey- get that right and could could secure a lifelong client.
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Fascinated by different sectors of the market place pointing fingers at the others. Never dealt with Saunders1865 but intrigued to see what the agents they do deals with think of this rather odd outburst. Being a Kensington agent that boasts of serving VIP clients I wonder how many of them actually are concerned about a few hundred quid to secure the property they want?
Seems to me Tony would be better off focusing on his company website which currently looks like it was built in 1865. Not very VIP if you ask me.
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