Tenant Fees Bill

Written evidence submitted by Sonny Sabharwal, Lettings Director, Hampton-Heath (TFB09)

Dear whom it may concern,

I have been keeping up to date with the tenant fees bill making its way to becoming law.

I would like to keep it very brief. Notably a ban on fees is not the wisest of plans. Instead there should be a cap on the amount charged after a survey is conducted after knowing what reference agencies typically charge.

Tenant’s costs cannot and should not be passed onto landlords and agents. A tenant would like to rent; therefore, they should cover there referencing costs. For example, a landlord or agent could absorb the cost for one applicant but usually it’s much more, couples, sharers and families. This is a lot of money for a landlord or agent to cover. On the flip side applicants have the option of withdrawing from negotiations, if this was to happen it would be unfair for the agent to pick up the invoice and it would be embarrassing to pass onto the landlord.

I totally agree that a lot of companies take advantage but allowing a ban would not solve the issue. The reaction to this would be, rents would be increased which would make it even more unfordable for the average worker. The lettings industry clearly needs a level playing field therefore a cap on the amount to be charged for reference checks and tenancy agreement/admin costs would be better.

A lettings business is like any other business, therefore for the service provided a fee should be paid. For example, our reference fee is very low and it cover the reference and right to rent checks and the extra £10 goes towards the lodgement of the file and processing costs. Our tenancy agreement fee is 50/50 between the landlord and tenant and this fair as they both are going into an agreement with one another on a 50/50 basis. Our agreements are drawn up professionally and we pay a fee for a well drafted fair tenancy agreement. Yes, some letting agents use a very weak agreement which they overcharge for which quite rightly is not correct.

I am a new business that has been trading for almost 1 year. My costs relating to tenant fees are fair and low, I have client money protection for landlords and tenants. As a new business it’s hard enough building your business and reputation with the added obstacle of covering tenant fees from our turnover or risk losing landlords if the fee was upped.

As an agent we are no different to any other business we receive an income for the services that are provided. I also believe the rogue; unqualified agents are the ones who have caused tenant fees to go in front of the government. Instead if mandatory qualifications and affiliations are sought then each governing body can restrict the amount charged in accordance with their membership.

May 2018


Prepared 4th June 2018