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Well I'm scared to say it but everything is looking really good with this new rental agreement, I'm collecting a building society cheque for seven months (including 1 months returnable deposit) from my new tenant. I've told the managing agent that I will be managing the property myself......Initially, he really tried it on and said that the tenant would need to pay him the six months up front and the deposit and they would then deduct their 350 plus vat finders fee and hold the deposit and then give me the rest of the money once everything was finalised. I very politely told him that the tenant will be paying me the rent up front (direct in to MY account) as I am managing the property !!! he backed down...! BUT one thing I'm not really sure about is the actual deposit .......the agent still seems to think he should hold that ......is this the case ? I want to hold the deposit myself....I will be doing the final inspection so it makes sense for me to hold the deposit ? What do you think ? Another thing is I've not actually signed anything with the agent so I don't really think he has a leg to stand on....and if he has all the money (which he initially asked for) I believe he would get me to sign an agency agreement which would tie me into paying another managing finders fee if the tenant stays on another six months (this tenant has already said he will probably stay on a further 6 months if ok with me) Does anyone know am I obliged to sign anything with the agent ? Do I have to pay him a further finders fee in six months time if I am managing the property myself ? I do want the agent to set up the tenancy agreement for me this time (this is included in the initial finders fee) I thought if I got ALL the funds off the tenant....AND the letting agent does his job properly and sets up the tenancy agreement as promised THEN I will pay him..... God I hope this makes sense to someone...my head is spinning !!!! Please let me know what you think asap as I have to make a decision by tonight what I'm doing regarding the deposit etc...... THANKS :blink::)

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Can't answer all of your questions.............

Any Letting Agent that demands a further finders fee for the next 6 Months .....Drop them!! This is a new thing coming into play by LA's and it verges on the crooked IMO.

Agents normally keep the deposit, mine does, suits me, but if you want to hold onto it is not a problem but there are new rules coming out soon whereby the deposit is to be held by a third party.

It is very unusual for LA's not to get your signature onto their contracts before they proceed.

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1) Deposit and rent money. I recommend setting up a separate account (e.g. with building society).

(1.1) It's quick and clear to find out where you are with the business, e.g. rent payments, costs, etc.

(1.2) The deposit is not 'lost' into your personal banking.

(1.3) A clear statement can be produced for inspection if in a case of dispute.

I'm not sure whether a BS would qualify as 'Third Party' as I haven't met the new regs. yet.

2) Letting Agents fees. If there's any doubt that you owe the agent for help in finding your tenant and drafting contracts etc. it's better to settle on a fee for work done to date. You never know when you might need their help (again). Leave a situation that you can go back to!

As I said earlier, plan for worst scenario.

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It's not quite true to say that the recurring 'finder's fee' is something new - for a long time it's been a fairly common thing in a contract between landlord and estate agents. If the tenant stays on for further terms of 6 months, it's because the tenant was found by the agent, so not entirely unfair. The 6 months is really an abitrary term - supposing leases were, say, 5 years, then you would expect to pay the proportionate sum in fees to the agent.

There is an argument for saying that the agent should benefit for having found the tenant for the whole of the occupancy.

And that is coming from a landlord not an estate agent!!!

What you need to do is to negotiate this clause out is some way or other. If you're signing an agreement, you might alter it to say' fee paying to the agent for the first 12 or 18 months', say. If there's not a written contract and unless you've verbally agreed terms with the estate agent - he has no rights at all to any payments, fees, or reimbursements.

BUT, as rightly pointed out - you might want to go back to the fellow in the future.

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Can I just add then to those comments.

I have been a Letting Landlord now for 16 years and I have used (I think) around 10 different Letting Agents or Agencies in that time. Each and every time it has been finding a Tenant only......No Management......I do the rest and manage my own properties.

I have never been charged any more money beyond the finder's fee at any other time by all the Agencies I have used. Some of my Tenants have been in place for 4 years, some 3, most over 2 years.

My last Agent.... Oct. 2005 charged me £411 inc. vat finder's fee which is about the going rate for a finder's fee in my location.

So, are you telling me that an Agent will charge a Landlord £411 every 6 Months?

and that's a good deal? Not in my book it's not.

They certainly wouldn't get my business and word would quickly spread around other Landlord's that this is a rip-off..... no other word to describe it.

But I take your point, make sure it is not in the small print when deciding to employ a Letting Agent, I certainly will in the future and the bottom line is they can Foxtrot Oscar and I will employ an Agent for a one off fixed finder's fee.

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Melboy speaks the truth, it's a complete rip-off.

The letting agent only 'found' the tenant for you once, so what entitles them to charge you more than once?

The initial work that they carried out, checks, vetting and associated overheads etc just about justifies the original finders fee. But what costs have they incurred the second time around with the same tenant in place?

Kick them into touch and next time use a different agent, they're queing up for your business believe me.

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I am a letting agent, I charge my client landlords, once only, when the tenants have been found, vetted & signed up, it is then only that I get paid. If a landlord would like a new lease in 6 months he can instruct us to prepare one and pay the going rate, but he owes us nothing for the tenant introduction, he has paid at the start. Of course it would be excellent if I could get away with it.

There are however, in my area, agents who do operate in this way.

I feel when I get commission it is for a service I have provided.

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