Why should tenants pay a fee to their letting agent?

In many areas of life we pay companies and service providers a fee for work done. Why should housing be any different? Mortgage lenders charge an administration fee for setting up a mortgage, and creating a tenancy is no different. Agents are running a business and like any business should be allowed to charge for the service they provide. 

Equally, tenants should be able to know what to expect in fees, and that it will be a fair price for the work done in setting up their tenancy. If there was no charge and after a couple of week’s work all of the referencing was done, a new tenancy agreement was set up for the tenant and the tenant decided against it, who would pay this cost?

Affordability: The rough yardstick is 32 times the rent. So if the rent is £1000pcm a tenant (or joint tenants between them) should earn (1000×32) £32,000 pa. If the tenant’s single or joint income is less than 32x the rent a guarantor will be needed and their income needs to be 32x the rent. The guarantor could be just for the lowest paid tenant.

The only costs are:

  • Referencing fee £110 inc vat per residing adult and guarantor if necessary. If a company let £110 inc vat. (Paid before referencing)
  • Administration and processing of all forms for the tenancy – fee £190 inc vat. (Paid before referencing)
  • One month’s rent in advance.
  • Security Deposit of one & a half times monthly rent. (Two months if pets allowed.)
  • Checking in, tenancy agreement, inventory and deposit holding scheme – NO EXTRA FEES.
  • Tenant’s Renewal of Tenancy (periodic) – NO EXTRA FEES.
  • Tenant’s Check out charge – NO EXTRA FEES.

The referencing & administration fees cover many aspects of checks to assure a landlord you will be a good tenant. The team at Cooper Adams letting spend a great deal of time in referencing our tenants, firstly meeting them at the property making sure it is the right one for them. Helping fill out the forms and paperwork. We instruct and pay a referencing company to verify all this information and thoroughly check a tenant’s suitability for payments. Amongst the referencing procedures are checking your credit status, current and previous employer, current or past landlords, income checks with recent bank statements proof of addresses as well as electoral roll, and taking into account any other information to help assess the affordability of your tenancy application. If inaccurate information is supplied or information withheld which results in an adverse report being received from our referencing agents the application will be rejected. 

Once the referencing process starts we cannot refund any fees if a tenant and or guarantor fails the referencing and an alternative guarantor cannot be provided. We always check suitability as much as we can before we process your application.