There are lots of different charges letting agents can and do make when you take on a tenancy in a property or they become your agent if you own a property to rent out. There are no hard and fast rules or regulations that state what can be charged and therefore it can vary significantly from letting agent to letting agent. It is vitally important to read the small print of all contracts before signing them to make sure you are completely clear of the implications under all potential circumstances or change in circumstances.
If you are a landlord then you need to be clear that there are no hidden charges that could potentially cause you to loose out on money. Just recently there has been a case which involved one of the most highly recognised letting agents in London misleading their clients, this of course was most likely not on purpose but it does flag up the issue of making sure you are clear on the contracts and reading all of the so called ‘small print’. If you are unclear or uncertain it does make sense to consult your solicitor as in the long run it could have the potential to save you a great deal of money. Just some of the clauses that have been found in landlord contracts include some of the following:-
• Landlord to pay 11% commission of the annual rent to the agent if the tenant stayed in the property beyond the initial term of the contract. This was even if the agent played no part in negotiating for them to stay on in the property.
• Commission of 2.5% of the property price should a tenant buy a property from the landlord and this again was even if the property agent played no part in the sale procedure.
These are just two cases and there are sure to be more of these across the country so the golden rule is to understand your contract completely before signing. If you are a novice buy-to-let landlord then this could be a very costly trap you fall into and could cost you money before you even start out.
Tenants should be aware of all the charges before signing contracts as well. Whether you are looking to extend your contact, start a new tenancy or move out of the property before you undertake anything be very clear. It is recommended to get someone else to read through the tenancy agreement as well as often two pairs of eyes are better than one and it may bring up some issues you may otherwise have missed. In essence if you take your time, do not rush and do not get pressured into signing a contract or tenancy agreement then you should be able to make a good informed decision as to whether it is the right choice for you.