How to avoid hidden fees from Letting Agencies

One of the main reasons for leaving my 'well paid job' and joining The Letting Experts is due to the way some letting agencies charge their landlords. Many agencies boast "We're proud of our fee transparency with straight-forward explanations and no hidden surprises." ... yet when it comes to it, it can be far from the truth.

So yes, I may have left the security of my employed job over morals, but now I am able to really make a difference to my clients. Make sure they are not overcharged and ensure they receive a service second to none.

This article highlights real fees being charged at some agencies here in Scotland and not intended to single out a certain agency or tar all agencies with the same brush. It's intended to help guide landlords in making an informed decision and maybe help raise the standards with other agencies too.

10 - The ID Verification Check

Agents are legally required to carry out identity and anti-money laundering checks alongside PEP and Sanction checks on both tenants and landlords. The cost of this is around £6 yet some agents can charge landlords between £10 and £20 so it is worth checking beforehand. It is illegal to charge a tenant this fee.

The ID Verification Check

9 - The Additional Quotation Fee

Sometimes things go wrong in the property and your property manager or Letting Expert will send you a quotation for maintenance for approval. Sometimes the first quote may seem high or maybe it's from the agent's own maintenance team so you want additional quotes. Some agents may charge you an additional quotation fee, typically £24 for the third and subsequent quotations.

The Additional Quotation Fee

8 - Safety Certificate Administrational Fee

Renewing safety certificates is essential and landlords rightly expect their agents to be on top of this and charge back the costs of the actual certificates and any remedial works.

But did you know, some agents charge between £24 and £60 as an admin fee? Do you think this can be justified in order to check the certificate to make sure it is valid? With the majority of properties requiring multiple certificates to keep their properties compliant, this could add an additional £300 plus per year.

Safety Certificate Administrational Fee

7 - Alarm Installation Arrangement Fee

If a smoke, heat or CO2 alarm needs to be installed or replaced it is a legal requirement. Whilst most landlords expect to pay for the alarm itself and installation, not all landlords would be expecting an admin fee from their letting agents though. One agency in Edinburgh charges £60 as an arrangement fee just for coordinating any install.

Alarm Installation Arrangement Fee

6 - Maintenance Inspection Fee

Both landlords and tenants appreciate a pro-active agent, one that checks on remedial works that need doing and again after works have completed. Beware though, as you agent may charge you an additional £120 for what others consider basic service.

Maintenance Inspection Fee

5 - Non-Resident Landlord Reporting Fee

If you as a landlord is overseas for 6 months or more per year, register with HMRC for the Non-Resident Landlord Scheme. This means you will receive the monthly rent without a deduction towards tax, meaning you can file your tax returns in the normal way. But be cautious that this non-deduction isn't taken as additional admin charges by your agent. It could add up to around £180 per year.

Non-Resident Landlord Reporting Fee

4 - Rent Review Admin Fee

There are many variables to consider when looking at a rent review and there are the right ways to go about it and the wrong ways. Clear communication is key, alongside a documented Market Rent Report and a correct notice being issued. It can seem a lot easier than it is, so make sure you have a letting expert to help guide you and your tenant through the process.

Rent Review Admin Fee

3 - Agency Exit Fee

If things go wrong between your letting agency and yourself, if you feel you are not getting the service you desire ... make sure they don't charge you to leave.

Agency Exit Fee

2 - Deposit Dispute Arbitration Fee

Let's firstly explain that the deposit protection scheme does not charge for arbitration. If you as landlord are filling out the form, submitting the proof like an inventory and quotations, why is your agent charging you?

Deposit Dispute Arbitration Fee

Before we reveal the number one fee to avoid

It is worth pointing out that not all Letting Agencies are the same. You can request our fee comparable checklist for free to compare your existing agency against our fees, or if you're shopping around. Also bear in mind service levels can vary considerably as well as fees.

Important info to bear in mind

1 - Maintenance Commission

This one is massive. Some agents charge 10% to 20% on any maintenance they arrange. The way it usually works is the contractor will add this to their quotation. If a repair costs £1,000 then you're likely paying between £100 and £200 just to your letting agent.

At the Letting Experts, we don't charge any maintenance commissions as part of a managed service to our landlords. What you see is what you pay, and that's how it should be.

Maintenance Commissions

Found this guide useful? If you already have an agency in place, why not review your contract bearing in mind you now know what to look for?

Request our free comparison checklist guide here:

Letting Agency Fee Comparison Checklist