Letting Agency Fees - reasonable/justifiable?
- Thread starter Haggisman
- Start date
Just spoken to them, apparently it's in case I move out and leave my girlfriend there, to make sure she can pay the rent
I see. That does make at least a little sense. If she wasn't in the equation at all then she wouldn't be a concern. However if you move out they can't just evict her, so they're left with a problem.
However that guarantor thing is -still- utter nonsense.
The reference check on her they can at least justify with a reason. As to if it's acceptable, or standard, or negotiable I don't know.
£90 to read a reference is laughable though. Do they get stuck at big words often?
Soldato
You're in for a big surprise then when you move out!
Hah, yeah maybe.. especially since deposit protections schemes aren't the law in scotland. We've been taking excellent car of the flat though and have a lot of photos from moving in day.
I pretended to be a potential customer with a couple of other letting agencies in the area, and the general consensus was... well, there wasn't really one, it seems that some would be happy with just me as a reference, and others would need the same as this place.
So, we decided just to bite the bullet and go for it in the end. It's a really nice house and in the right area (in fact it's in the exact road we were looking for!) and they don't come up very often. They're also redoing the garden before they let it, so much as it pains me to give in, we don't have much choice if we want this house
Associate
- Joined
- 23 Nov 2009
- Posts
- 1,195
You are lucky to live in Scotland. It would have been illegal for the agent or landlord to have charged you anything other than rent and a deposit.
They do more than just a credit check I think they check another 'bad tennant' database as well... Personally I would want anyone credit checked there are so many people wanting to rent if anything bad came back on anyone who would stay there I'd simply move to the next prospective tennant
Update on this,
After having to chase them repeatedly, they've come back and said the following:
My partner's reference is fine except for her financials, as she has no income (no ****, we told them this), but they can accept her with a guarantor.
My reference is fine except for a blip in my credit history, but they can accept me with a guarantor (fine, we have one).
The guarantor's reference is fine and is able to cover my partner. But not me?!
Surely the guarantor is there to cover the whole rent, in the event it isn't paid? Apparently not, they only referenced her to cover my partner's share of the rent. Which is £0.
Now they are demanding we provide another guarantor, and pay another £75 for the referencing. I told them (nicely at first) in no uncertain terms that we were happy to provide another guarantor, but we weren't paying any more referencing fees, and requested they negotiate with the landlord to see if he would be willing to take us anyway. Apparently not, so now it's time to try and get our fees back.
I've drafted a letter, please can I have some feedback?
=============
Letting agency address
7th June 2012
Dear Managing Director,
Regarding: Property Address
As it has not been possible to resolve this matter amicably and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.
On Saturday 19th May 2012 we viewed the property in question (with NAME), and immediately following this viewing visited your office to place a holding deposit and begin the referencing process.
At the office, we were dealt with by NAME, and before any further discussion, made sure to inform her that as my partner was not working, I would be solely responsible for paying the full rent. We were told that my partner would still need to be referenced, and that as she was not working we would also need a guarantor. At the time we felt this was rather untoward, as if I failed to pay my share of the rent it would then fall to the guarantor, and so my partner’s financial status was irrelevant, however we were assured this was standard practice, and so reluctantly agreed to provide the guarantor’s details on the following Monday (21st May). At this point we paid £90 each for our referencing fee (£180 total) with the agreement to pay the additional £75 for the guarantor’s reference on the Monday at the same time as we returned our application forms. At no point was the possibility of the need for another guarantor mentioned.
On Monday 21st May 2012, I visited the office again with our guarantor. We paid the outstanding £75 as agreed, and made a point of asking NAME to look over our application forms and the requested documentary evidence to make sure it was all in order; she did so, and informed us that it would take approximately 5 working days for us to hear any results.
At this point we left the office under the impression that even should my financial reference be insufficient, the guarantor we provided would be adequate to secure the property, being both a home and business owner, with a good credit history and significant savings. Again, at no point was the possibility of the need for another guarantor mentioned.
On Wednesday 30th May 2012 I contacted the agency for an update on our application, to be told that, while the majority of our references were good, due to my financial history, I had failed on the credit check, and would require a guarantor.
I was confused at this, since we had already provided a guarantor, and asked why that wasn’t sufficient; I was told that the guarantor we had provided was only able to cover my partner’s share of the rent. I did raise the point that my partner’s share of the rent was non-existent, however apparently the guarantor had only been referenced to cover half of the rent, and so another guarantor would still be required for me and if I had any further questions I should speak to the referencing agency. I contacted them on the same day, and was given the same information.
After discussion with my partner, we agreed that we weren’t happy with this situation, being left with the choice to either pay a further £75 for another guarantor reference (if we could even find another guarantor) or forfeit the money we had already paid (£255 in total).
On Thursday 31st May 2012 I called the agency to discuss the options available to us, and spoke to NAME. I made it clear that we could try to provide another guarantor, however we weren’t prepared to pay for another reference fee. I also requested that she speak to the landlord to enquire if he was willing to let the property to us anyway.
On the afternoon of Wednesday 6th of June 2012 I called the agency again to enquire as to any progress and ensure they were aware of our position.
On Thursday 7th June 2012 I was called by NAME from the agency, who informed me that the landlord was unwilling to go forward with the agreement without another guarantor, and that AGENCY were unwilling to negotiate on the referencing fees.
At this point, I feel we are being held to ransom for the fees we have already paid and that, AGENCY - acting as the landlord’s agent - have effectively cancelled the agreement.
The Office of Fair Trading, Guidance on unfair terms in tenancy agreements; paragraph 3.67 is clear on this scenario, stating:
“Under a pre-tenancy agreement the tenant pays a deposit to the landlord or agent to secure a property before signing the actual tenancy agreement. We object to cancellation clauses if they allow the landlord or agent to cancel without acknowledging any right of tenants to a refund of prepayments, particularly where the terms state that the landlord can decide not to grant a tenancy, and retain the tenant's pre-contract deposit.”
This is with reference to Schedule 2, paragraph 1 of The Unfair Terms in Consumer Contracts Regulations 1999, which states that terms are unfair if they have the object or effect of:
“….permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract.”
In addition, the Guidance on unfair terms in tenancy agreements also states:
Paragraph 3.38.
“In general we consider terms to be unfair if they exclude the consumer's basic rights under contract law to the advantage of the supplier. Consumers are entitled to a refund of prepayments made under a contract that does not go ahead, or that ends before they have enjoyed any significant benefit.”
Paragraph 3.41.
“A 'no refund' term where the tenant is required to make a substantial prepayment before a tenancy agreement is signed, is likely to be unfair. It is common for letting agents to seek a deposit from the prospective tenant once a property has been selected, but terms that preclude refunds of this type of deposit, under any circumstances, may be considered unfair.”
Paragraph 3.42.
“Where cancellation is the fault of the tenant, the landlord or agent is entitled to hold back from any refund of prepayments a reasonable sum to cover either the net costs or the net loss of profit resulting directly from the default, but not both where this would lead to double counting. Tenants would be at fault if, for instance, they gave false or misleading information, but not merely because the landlord thought their references were not sufficiently good (see paragraph 3.68).”
Paragraph 3.68.
“A landlord may refuse to offer a tenancy if the tenant's references are unsatisfactory or the tenant fails the verifying or screening process used by the landlord or the agent. However, because landlords or agents have the right to decide what is unsatisfactory or the criteria for failing the screening process, there is scope for them to enjoy unlimited discretion to refuse the tenancy, and so to unfairly retain the deposit. This is unacceptable in our view.”
Paragraph 3.69.
“…we would expect there to be a full refund of all pre-payments where there has been no breach of the agreement by the tenant and the landlord chooses not to proceed with the tenancy, whether or not the landlord views the tenant's references as satisfactory.”
With regards to these terms, it is apparent that AGENCY owe me the following amounts:
• Tenant referencing fee for ME £90.00
• Tenant referencing fee for PARTNER £90.00
• Guarantor referencing fee for GUARANTOR £75.00
Total: £255.00
I am however aware that AGENCY have incurred costs as part of the application process, and so as a gesture of goodwill, am prepared to allow for a reduction of £90.00 to cover the cost of referencing with REFERENCING AGENCY, resulting in a final amount owed of £165.00.
Listed below are the documents on which I intend to rely in my claim against you:
• The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083)
• Office of Fair Trading, Guidance on unfair terms in tenancy agreements (September 2005)
In accordance with Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:
• REFERENCING AGENCY reference reports
I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts and would invite you to put forward any proposals in this regard.
In closing I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. I look forward to hearing from you within the next 28 days, should I not receive a response to my letter within this time frame then I anticipate that court action will be commenced with no further reference to you.
Yours sincerely,
ME
After having to chase them repeatedly, they've come back and said the following:
My partner's reference is fine except for her financials, as she has no income (no ****, we told them this), but they can accept her with a guarantor.
My reference is fine except for a blip in my credit history, but they can accept me with a guarantor (fine, we have one).
The guarantor's reference is fine and is able to cover my partner. But not me?!
Surely the guarantor is there to cover the whole rent, in the event it isn't paid? Apparently not, they only referenced her to cover my partner's share of the rent. Which is £0.
Now they are demanding we provide another guarantor, and pay another £75 for the referencing. I told them (nicely at first) in no uncertain terms that we were happy to provide another guarantor, but we weren't paying any more referencing fees, and requested they negotiate with the landlord to see if he would be willing to take us anyway. Apparently not, so now it's time to try and get our fees back.
I've drafted a letter, please can I have some feedback?
=============
Letting agency address
7th June 2012
Dear Managing Director,
Regarding: Property Address
As it has not been possible to resolve this matter amicably and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.
On Saturday 19th May 2012 we viewed the property in question (with NAME), and immediately following this viewing visited your office to place a holding deposit and begin the referencing process.
At the office, we were dealt with by NAME, and before any further discussion, made sure to inform her that as my partner was not working, I would be solely responsible for paying the full rent. We were told that my partner would still need to be referenced, and that as she was not working we would also need a guarantor. At the time we felt this was rather untoward, as if I failed to pay my share of the rent it would then fall to the guarantor, and so my partner’s financial status was irrelevant, however we were assured this was standard practice, and so reluctantly agreed to provide the guarantor’s details on the following Monday (21st May). At this point we paid £90 each for our referencing fee (£180 total) with the agreement to pay the additional £75 for the guarantor’s reference on the Monday at the same time as we returned our application forms. At no point was the possibility of the need for another guarantor mentioned.
On Monday 21st May 2012, I visited the office again with our guarantor. We paid the outstanding £75 as agreed, and made a point of asking NAME to look over our application forms and the requested documentary evidence to make sure it was all in order; she did so, and informed us that it would take approximately 5 working days for us to hear any results.
At this point we left the office under the impression that even should my financial reference be insufficient, the guarantor we provided would be adequate to secure the property, being both a home and business owner, with a good credit history and significant savings. Again, at no point was the possibility of the need for another guarantor mentioned.
On Wednesday 30th May 2012 I contacted the agency for an update on our application, to be told that, while the majority of our references were good, due to my financial history, I had failed on the credit check, and would require a guarantor.
I was confused at this, since we had already provided a guarantor, and asked why that wasn’t sufficient; I was told that the guarantor we had provided was only able to cover my partner’s share of the rent. I did raise the point that my partner’s share of the rent was non-existent, however apparently the guarantor had only been referenced to cover half of the rent, and so another guarantor would still be required for me and if I had any further questions I should speak to the referencing agency. I contacted them on the same day, and was given the same information.
After discussion with my partner, we agreed that we weren’t happy with this situation, being left with the choice to either pay a further £75 for another guarantor reference (if we could even find another guarantor) or forfeit the money we had already paid (£255 in total).
On Thursday 31st May 2012 I called the agency to discuss the options available to us, and spoke to NAME. I made it clear that we could try to provide another guarantor, however we weren’t prepared to pay for another reference fee. I also requested that she speak to the landlord to enquire if he was willing to let the property to us anyway.
On the afternoon of Wednesday 6th of June 2012 I called the agency again to enquire as to any progress and ensure they were aware of our position.
On Thursday 7th June 2012 I was called by NAME from the agency, who informed me that the landlord was unwilling to go forward with the agreement without another guarantor, and that AGENCY were unwilling to negotiate on the referencing fees.
At this point, I feel we are being held to ransom for the fees we have already paid and that, AGENCY - acting as the landlord’s agent - have effectively cancelled the agreement.
The Office of Fair Trading, Guidance on unfair terms in tenancy agreements; paragraph 3.67 is clear on this scenario, stating:
“Under a pre-tenancy agreement the tenant pays a deposit to the landlord or agent to secure a property before signing the actual tenancy agreement. We object to cancellation clauses if they allow the landlord or agent to cancel without acknowledging any right of tenants to a refund of prepayments, particularly where the terms state that the landlord can decide not to grant a tenancy, and retain the tenant's pre-contract deposit.”
This is with reference to Schedule 2, paragraph 1 of The Unfair Terms in Consumer Contracts Regulations 1999, which states that terms are unfair if they have the object or effect of:
“….permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract.”
In addition, the Guidance on unfair terms in tenancy agreements also states:
Paragraph 3.38.
“In general we consider terms to be unfair if they exclude the consumer's basic rights under contract law to the advantage of the supplier. Consumers are entitled to a refund of prepayments made under a contract that does not go ahead, or that ends before they have enjoyed any significant benefit.”
Paragraph 3.41.
“A 'no refund' term where the tenant is required to make a substantial prepayment before a tenancy agreement is signed, is likely to be unfair. It is common for letting agents to seek a deposit from the prospective tenant once a property has been selected, but terms that preclude refunds of this type of deposit, under any circumstances, may be considered unfair.”
Paragraph 3.42.
“Where cancellation is the fault of the tenant, the landlord or agent is entitled to hold back from any refund of prepayments a reasonable sum to cover either the net costs or the net loss of profit resulting directly from the default, but not both where this would lead to double counting. Tenants would be at fault if, for instance, they gave false or misleading information, but not merely because the landlord thought their references were not sufficiently good (see paragraph 3.68).”
Paragraph 3.68.
“A landlord may refuse to offer a tenancy if the tenant's references are unsatisfactory or the tenant fails the verifying or screening process used by the landlord or the agent. However, because landlords or agents have the right to decide what is unsatisfactory or the criteria for failing the screening process, there is scope for them to enjoy unlimited discretion to refuse the tenancy, and so to unfairly retain the deposit. This is unacceptable in our view.”
Paragraph 3.69.
“…we would expect there to be a full refund of all pre-payments where there has been no breach of the agreement by the tenant and the landlord chooses not to proceed with the tenancy, whether or not the landlord views the tenant's references as satisfactory.”
With regards to these terms, it is apparent that AGENCY owe me the following amounts:
• Tenant referencing fee for ME £90.00
• Tenant referencing fee for PARTNER £90.00
• Guarantor referencing fee for GUARANTOR £75.00
Total: £255.00
I am however aware that AGENCY have incurred costs as part of the application process, and so as a gesture of goodwill, am prepared to allow for a reduction of £90.00 to cover the cost of referencing with REFERENCING AGENCY, resulting in a final amount owed of £165.00.
Listed below are the documents on which I intend to rely in my claim against you:
• The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083)
• Office of Fair Trading, Guidance on unfair terms in tenancy agreements (September 2005)
In accordance with Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:
• REFERENCING AGENCY reference reports
I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts and would invite you to put forward any proposals in this regard.
In closing I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. I look forward to hearing from you within the next 28 days, should I not receive a response to my letter within this time frame then I anticipate that court action will be commenced with no further reference to you.
Yours sincerely,
ME
far far too long.
will update with more...
Your quoted paragraphs are talking about returning deposits, not referencing fee's, so doubt they hold much weight here.
You should just bullet point some relevant facts and legislation and leave the whole story for the particulars of claim.
You may want to lookup some soga in terms of unfit for purpose - you were told you needed a guarantor for your partner, but were then told this was worthless because it only protects your partner's £0 contribution - that's got to be some kind of dodgy selling/agent negligence.
And that is likely the only reason you will get any more money back, if at all, because from the legislation quoted I don't see why you would be entitled to anything.
will update with more...
Your quoted paragraphs are talking about returning deposits, not referencing fee's, so doubt they hold much weight here.
You should just bullet point some relevant facts and legislation and leave the whole story for the particulars of claim.
You may want to lookup some soga in terms of unfit for purpose - you were told you needed a guarantor for your partner, but were then told this was worthless because it only protects your partner's £0 contribution - that's got to be some kind of dodgy selling/agent negligence.
And that is likely the only reason you will get any more money back, if at all, because from the legislation quoted I don't see why you would be entitled to anything.
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The next step is of course https://www.moneyclaim.gov.uk/web/mcol/welcome
Doh, and I forgot to add about if it ends up going to court i will be claiming for the full amount including the ~£30 claim fee.
Doh, and I forgot to add about if it ends up going to court i will be claiming for the full amount including the ~£30 claim fee.
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Some refer to "prepayments" rather than deposits, so I still think they're relevant (and the fees are far in excess of the costs incurred by the agency!), but I'll filter out the ones which refer specifically to deposits.
It's pretty obvious they're seeing ££ and just want to make another easy £45 off us (on top of the £165 they've already made)
I take your point about it being too long, will see what I can do about condensing it (significantly!
)
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Soldato
Whilst this is a classic case of letting agencies basically having the easiest job in the world and somehow attracts the biggest bunch of incompetent shysters there is, I have a feeling you're a bit screwed.
Reason being, if they have worded the fees like the scumbags they undoubtedly are, you haven't yet paid any 'holding deposit' - the fees you have paid are for 'reference checks' (which incidentally probably cost about 5 quid tops).
Which then leaves you in the unpleasant situation that these vampiric bottom-feeders have essentially fulfilled their contract with you in performing the reference checks that you paid for, but the landlord has decided that they want another guarantor before they proceed - so you can either cough up yet another ridiculous credit check fee or write off the ones you've paid for and ask for the results so you can frame them and use them as one of the more expensive pieces of artwork you own.
Reason being, if they have worded the fees like the scumbags they undoubtedly are, you haven't yet paid any 'holding deposit' - the fees you have paid are for 'reference checks' (which incidentally probably cost about 5 quid tops).
Which then leaves you in the unpleasant situation that these vampiric bottom-feeders have essentially fulfilled their contract with you in performing the reference checks that you paid for, but the landlord has decided that they want another guarantor before they proceed - so you can either cough up yet another ridiculous credit check fee or write off the ones you've paid for and ask for the results so you can frame them and use them as one of the more expensive pieces of artwork you own.
Some refer to "prepayments" rather than deposits, so I still think they're relevant (and the fees are far in excess of the costs incurred by the agency!), but I'll filter out the ones which refer specifically to deposits.
It's pretty obvious they're seeing ££ and just want to make another easy £45 off us (on top of the £165 they've already made)
I take your point about it being too long, will see what I can do about condensing it (significantly!
yes, prepayment means something you pay towards the rent/deposit. It doesn't include any agency fees from what I can see.
imo, your best chance of getting money back is pay up now, and continue with court action for your partner's guarantor fees. However, whether you actually want to 'seal the deal' with these chumps is another issue entirely
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Dear X
Regarding: X
As it has not been possible to resolve this matter amicably and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.
On Saturday 19th May 2012 my partner and I viewed the property in question, and immediately following this viewing visited your office to place a holding deposit and begin the referencing process.
We informed the agency that the tenancy should be solely in my name as my partner was not working, but were informed she would still need to be referenced, and in addition we would need a guarantor. As requested, we provided the details for a guarantor, and paid their referencing fee.
On Thursday 7th June the agency informed us that our references were unsatisfactory and that we required an additional guarantor, and would need to pay an additional fee for the referencing.
At this point, I feel we are being held to ransom for the pre-payments we have already made and that, X - acting as the landlord’s agent – are effectively cancelling the agreement should we not agree this additional fee.
The Office of Fair Trading, Guidance on unfair terms in tenancy agreements; paragraph 3.67 is clear on this scenario, stating:
“… We object to cancellation clauses if they allow the landlord or agent to cancel without acknowledging any right of tenants to a refund of prepayments”
This is with reference to Schedule 2, paragraph 1 of The Unfair Terms in Consumer Contracts Regulations 1999, which states that terms are unfair if they have the object or effect of:
“….permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract.”
In addition, the Guidance on unfair terms in tenancy agreements also states:
Paragraph 3.38.
“In general we consider terms to be unfair if they exclude the consumer's basic rights under contract law to the advantage of the supplier. Consumers are entitled to a refund of prepayments made under a contract that does not go ahead, or that ends before they have enjoyed any significant benefit.”
Paragraph 3.41.
“A 'no refund' term where the tenant is required to make a substantial prepayment before a tenancy agreement is signed, is likely to be unfair. It is common for letting agents to seek a deposit from the prospective tenant once a property has been selected, but terms that preclude refunds of this type of deposit, under any circumstances, may be considered unfair.”
Paragraph 3.42.
“Where cancellation is the fault of the tenant, the landlord or agent is entitled to hold back from any refund of prepayments a reasonable sum to cover either the net costs or the net loss of profit resulting directly from the default, but not both where this would lead to double counting. Tenants would be at fault if, for instance, they gave false or misleading information, but not merely because the landlord thought their references were not sufficiently good (see paragraph 3.68).”
Paragraph 3.68.
“A landlord may refuse to offer a tenancy if the tenant's references are unsatisfactory or the tenant fails the verifying or screening process used by the landlord or the agent. However, because landlords or agents have the right to decide what is unsatisfactory or the criteria for failing the screening process, there is scope for them to enjoy unlimited discretion to refuse the tenancy”
Paragraph 3.69.
“…we would expect there to be a full refund of all pre-payments where there has been no breach of the agreement by the tenant and the landlord chooses not to proceed with the tenancy, whether or not the landlord views the tenant's references as satisfactory.”
With regards to these terms, it is apparent that Partridge Homes owe me the following amounts:
• Tenant referencing fee for X £90.00
• Tenant referencing fee for X £90.00
• Guarantor referencing fee for X £75.00
Total: £255.00
I am however aware that Xs have incurred costs as part of the application process, and so as a gesture of goodwill, am prepared to allow for a reduction of £90.00 to cover the cost of referencing with Legal4Landlords, resulting in a final amount owed of £165.00.
Listed below are the documents on which I intend to rely in my claim against you:
• The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083)
• Office of Fair Trading, Guidance on unfair terms in tenancy agreements (September 2005)
In accordance with Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:
• X reference reports
I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts and would invite you to put forward any proposals in this regard.
In closing I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. I look forward to hearing from you within the next 28 days, should I not receive a response to my letter within this time frame then I anticipate that court action will be commenced with no further reference to you.
Should this be the case, I shall be claiming for the full amount owed, including the £25.00 claim fee.
Yours sincerely,
X
Regarding: X
As it has not been possible to resolve this matter amicably and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.
On Saturday 19th May 2012 my partner and I viewed the property in question, and immediately following this viewing visited your office to place a holding deposit and begin the referencing process.
We informed the agency that the tenancy should be solely in my name as my partner was not working, but were informed she would still need to be referenced, and in addition we would need a guarantor. As requested, we provided the details for a guarantor, and paid their referencing fee.
On Thursday 7th June the agency informed us that our references were unsatisfactory and that we required an additional guarantor, and would need to pay an additional fee for the referencing.
At this point, I feel we are being held to ransom for the pre-payments we have already made and that, X - acting as the landlord’s agent – are effectively cancelling the agreement should we not agree this additional fee.
The Office of Fair Trading, Guidance on unfair terms in tenancy agreements; paragraph 3.67 is clear on this scenario, stating:
“… We object to cancellation clauses if they allow the landlord or agent to cancel without acknowledging any right of tenants to a refund of prepayments”
This is with reference to Schedule 2, paragraph 1 of The Unfair Terms in Consumer Contracts Regulations 1999, which states that terms are unfair if they have the object or effect of:
“….permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract.”
In addition, the Guidance on unfair terms in tenancy agreements also states:
Paragraph 3.38.
“In general we consider terms to be unfair if they exclude the consumer's basic rights under contract law to the advantage of the supplier. Consumers are entitled to a refund of prepayments made under a contract that does not go ahead, or that ends before they have enjoyed any significant benefit.”
Paragraph 3.41.
“A 'no refund' term where the tenant is required to make a substantial prepayment before a tenancy agreement is signed, is likely to be unfair. It is common for letting agents to seek a deposit from the prospective tenant once a property has been selected, but terms that preclude refunds of this type of deposit, under any circumstances, may be considered unfair.”
Paragraph 3.42.
“Where cancellation is the fault of the tenant, the landlord or agent is entitled to hold back from any refund of prepayments a reasonable sum to cover either the net costs or the net loss of profit resulting directly from the default, but not both where this would lead to double counting. Tenants would be at fault if, for instance, they gave false or misleading information, but not merely because the landlord thought their references were not sufficiently good (see paragraph 3.68).”
Paragraph 3.68.
“A landlord may refuse to offer a tenancy if the tenant's references are unsatisfactory or the tenant fails the verifying or screening process used by the landlord or the agent. However, because landlords or agents have the right to decide what is unsatisfactory or the criteria for failing the screening process, there is scope for them to enjoy unlimited discretion to refuse the tenancy”
Paragraph 3.69.
“…we would expect there to be a full refund of all pre-payments where there has been no breach of the agreement by the tenant and the landlord chooses not to proceed with the tenancy, whether or not the landlord views the tenant's references as satisfactory.”
With regards to these terms, it is apparent that Partridge Homes owe me the following amounts:
• Tenant referencing fee for X £90.00
• Tenant referencing fee for X £90.00
• Guarantor referencing fee for X £75.00
Total: £255.00
I am however aware that Xs have incurred costs as part of the application process, and so as a gesture of goodwill, am prepared to allow for a reduction of £90.00 to cover the cost of referencing with Legal4Landlords, resulting in a final amount owed of £165.00.
Listed below are the documents on which I intend to rely in my claim against you:
• The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083)
• Office of Fair Trading, Guidance on unfair terms in tenancy agreements (September 2005)
In accordance with Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:
• X reference reports
I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts and would invite you to put forward any proposals in this regard.
In closing I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. I look forward to hearing from you within the next 28 days, should I not receive a response to my letter within this time frame then I anticipate that court action will be commenced with no further reference to you.
Should this be the case, I shall be claiming for the full amount owed, including the £25.00 claim fee.
Yours sincerely,
X
Surely:
“In general we consider terms to be unfair if they exclude the consumer's basic rights under contract law to the advantage of the supplier. Consumers are entitled to a refund of prepayments made under a contract that does not go ahead, or that ends before they have enjoyed any significant benefit.”
Would cover any kind of pre-payment, regardless of whether it's a fee or deposit?
Otherwise what's to stop the agency offering the property to 20-30 people, making £1-200 off each of them and then saying all their references failed?
I don't particularly, as this is a pretty obvious sign of things to come (made up inventory, extortionate renewal fees etc) in fact I'm pretty close to going all postal on them XD
Associate
To the OP
In a fair world, the agency would be able to take you on as the tenant named on the final contract with responsibility to pay the rent but the partner lives there as a permitted resident (doesn't have to sign any final docs). The catch being that if you split up, the partner can't remain in the house alone as they were not vetted on their ability to pay the rent (employment etc). Most agencies seem to do this if they want tenants in their properties.
In a fair world, the agency would be able to take you on as the tenant named on the final contract with responsibility to pay the rent but the partner lives there as a permitted resident (doesn't have to sign any final docs). The catch being that if you split up, the partner can't remain in the house alone as they were not vetted on their ability to pay the rent (employment etc). Most agencies seem to do this if they want tenants in their properties.
That bit that talks about any kind of benefit means it is implicit in the definition of prepayment - prepayment does not include references/guarantor fees.
because anyone can ask to see their results?
Soldato
The point being though that the agency have fulfilled their obligations - they (presumably) told you that there was a non-refundable credit check fee etc etc - you paid the money, they did the credit check - the contract between you and the agency has been fulfilled. The pre-payments you reference are talking about things like 1 weeks rent in advance as a holding deposit rather than 'administration fees' on top.
Do you have anything in writing about the credit check fee you paid or was it all verbal?
In response to your last question - nothing if the people genuinely failed. If they were fraudulently reporting the credit checks as failed then obviously that's a different matter.
*edit*
I would see if the agency a licenced member of ARLA and if so, raise a grievance through them - I believe they actually have some teeth and whilst morally I think you should be getting all your money back and some, legally it doesn't seem quite so black and white.
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Soldato
- Joined
- 21 Apr 2007
- Posts
- 6,611
letting agent tried to charge us 100 pound admin fees in leeds.
We literally just rang them refused said we'll pay you 60 as 100 is ridiculous every other agent we've been with made us pay 50 which is still to much.
They didn't even check out guarantor references or anything.
Lazy ****s.
We literally just rang them refused said we'll pay you 60 as 100 is ridiculous every other agent we've been with made us pay 50 which is still to much.
They didn't even check out guarantor references or anything.
Lazy ****s.
The agency do benefit from the fees - to the tune of £60 for a tenant and £45 for a guarantor.
The results are irrelevant when it's up to the agency/landlord to define what they class as being "acceptable".
All verbal, all I have is 2 receipts, one for £180 for me and my partner, and one for £75 for the guarantor
Again, it's up to the agency to decide what's a pass and what's a fail, so the actual results don't really matter.
Edit: apparently not
I'm not asking for it all back, and like I stated in the letter, I'm perfectly happy to let them keep the 3x£30 the references actually cost them, I just don't feel it's appropriate for them to make £165 off us for passing on some forms and relaying the responses, particularly when we're not actually getting anything out of it.
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Associate
- Joined
- 23 Nov 2009
- Posts
- 1,195
I think you are on a hiding to nothing, but give it a go anyway.
There were no prepayments - that would be if, for example, you had handed over a deposit or rent in advance. You paid for a reference, the reference was done. The agent is being a douche, but that is not grounds for legal action. You could argue it under "treat consumers fairly" but dubious...
Make sure any offer is made "without prejudice, save as to costs".
There were no prepayments - that would be if, for example, you had handed over a deposit or rent in advance. You paid for a reference, the reference was done. The agent is being a douche, but that is not grounds for legal action. You could argue it under "treat consumers fairly" but dubious...
Make sure any offer is made "without prejudice, save as to costs".