Tenant fees are under fire again

by | Aug 31, 2016

Tenant fees are under fire again, as generation rent claims, we charge exorbitant fees, merely for and I quote “photocopying a piece of paper” well rather than all commenting on misguided facts, let’s look at the REAL truth, of what legislation dictates, that we actually do in order to move a tenant into a property, most of which is to protect the tenant…

When an application is received, we of course put any offers to the landlord and the chosen applicant will go through referencing, but first we have to ensure that the tenant has a RIGHT TO RENT in the UK, which means that we have to make sure they have the appropriate documents, visa’s, etc. to be able and entitled to live in the UK.

If we fail to do this, then this is a criminal offence, for which a jail sentence is possible.

But most people think, ah well that’s only one in say 100 tenants, you have to do that for? WRONG. Because of discrimination laws, we have to carry out these checks on ALL tenants, whether from the UK or anywhere, so as not to discriminate. The challenges come when the tenants are actually overseas (meaning we cannot see original documents) some parties of the tenancy are coming over later, or where there are children in the family about to come of age…, these checks will typically take around 1 hour in total to administer, obtain and check.

After this, the referencing will commence and all the chasing of previous landlords, previous and current employers, credit searches etc. This is pretty normal stuff but whilst this is going on, let’s have a look at what else we need to do. Referencing can take HOURS in a complex case or a couple of hours in a simple case. It’s all dependant on the number of applicants and the history but on average I would say for us, it takes around 3 hours.

Due to the DEPOSIT handling regulations, under the HOUSING act, we have to prepare an inventory, and this is not a piece of paper with some writing on any more. In order to fully comply and offer the tenant the protection for their deposit, this needs to be extensive and will run normally into 20+ pages, which includes, photos, meter readings, key descriptions, décor, condition, location of items, age, quality etc.A typical inventory will take around 4 hours in total, but can take up to 7 hours to prepare.

Are your properties safe? 

Because of safety laws, it is a requirement that all properties are “safe” and therefore the onus falls on the agent here to organise the gas certification, electrical checks, emergency lighting and fire safety within HMO properties etc., which all in all can take another 2 hours to organise, arrange keys and access, visit the property etc.

On top of the above,, under the Smoke Alarm and Carbon Monoxide act 2015, it is a requirement that the landlord and therefore the agent, TEST the smoke alarms and Carbon monoxide detectors, ON THE DAY OF MOVE IN!

Not a few days before when we prepared the inventory or took the meter reading, but on the actual day they move in!

This one piece of legislation alone has added at least 1.5 hours on average (getting to the property, testing alarm, recording tests and returning to office and finding parking AGAIN)  to a letting agents time requirement on the day of move in, and creates a logistical nightmare, when there are 10 move ins on the last day of the month!

Next, we have to prepare the TENANCY AGREEMENT.  Now if we ignore the time taken to ensure that our agreement is the most current and up to date version, including ALL of the continuous regulation changes that occur each year (ours are updated at least 3 times per year) then the job of tenancy creation falls on the agent, and within this care has to be made in seeking the current information from the landlords/tenant: what has been agreed, the term, rent, deposit, correct names and addresses for service of notices, any specific or individual arrangement or special clauses, pets clauses, break clauses etc.

Then, this has to be prepared in the correct format, Assured shorthold tenancy, non-housing act tenancy or License, for example, and they carry the burden of getting this right, but it doesn’t end there… due to the deposit regulation, the PRESCRIBED TERMS in relation to deposit handling, have to be issued as required and failure to do so can cause heavy financial penalties on the agent and landlord so care and attention has to be made HERE. This can take up to 3 hours, to gather the correct information, prepare the special terms and produce the agreement (this is what is described as photocopying a piece of paper)

Then we have to organise the MOVE IN, now that we have already spent 13.5 hours on this application (not including gathering and checking keys, viewings at the property or general query time) we now have the growingly daunting task of the move in itself…

Due to the De Regulation act of last year, there is now such a responsibility on the agent at this point in time to fulfil, with severe financial penalties if they don’t, and these are: issue the latest government “HOW TO RENT GUIDE” plus prove that the SMOKE ALARM was tested, plus give a copy of the latest EPC, Issue DEPOSIT REGISTRATION CERTIFICATE, GAS certificate, INVENTORY, plus the usual keys, tenancy copies, receipt, standing order, contact details for landlord/managing agent, copy of the lease on the premises (if applicable) and serve any prior ground notices required etc. and go through with the tenant, giving them time to review documents, answers questions etc. How long does this take? On average 2 hours to prepare and 1.5 hour to go through with the tenant on move in…

So there you have it, a total of 17 hours of work, for the regulatory requirements of carrying out a “let” for a tenant moving into a property, which the press is describing as “photocopying a piece of paper… so please excuse me if I get angry, but that description is a pure insult, and a demonstration of lack of understanding of the legislations in place currently and the work involved in performing these very important tasks, that the government has put in place, let’s face it, in most cases, to protect tenants, NOT landlords.

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