A decent agent in Northampton
or Rugby charges about 10% of the rent on a
monthly basis to manage the property. Unregulated agents probably charge less.
We often get asked what we do in return for the charges we make. The text below is
taken from an email I received earlier this year from a landlord customer. It
has been reproduced on this blog with the permission of the sender.
"Dear Richard,
You may remember that
you used to manage our property in Beckets View, Northampton
I realise now that you
may have been right! Whilst the same tenants are in there, pay the rent, and
look after the place, we've had a number of issues over the last 12 months that
have caused stress and problems, particularly for my wife who has been dealing
with the tenants. A broken washing machine, a mis-placed car park permit, and
some failed lighting in the communal areas have all led to situations where the
tenant has sought a refund or deduction from the rent. They tell me they are
entitled to this, and I really don't know if they are or if they aren't. They
also phone up every time a light bulb pops and tell me there are electrical
problems in the property that I need to fix. I don't think there are. They have
withheld rent on a couple of occasions, and I really don't know how I should
respond in situations like this.
I appreciate now that as an agent, you handle
things like this for me, and field the never ending phone calls from the
tenant!! I would prefer it if we could go back to our old arrangement whereby
you manage the property and I pay you the required fee - I have dipped my toe
and not enjoyed the experience! Please don't say I told you so. I’d like the
tenant to stay, but you deal with them please".
So
when an agent manages a property, what are you paying for? Most people think
it’s to collect the rent and deal with any maintenance issues. That’s certainly
correct, but in practice it’s much more than that. In addition:
1.
we field hundreds of calls every month from tenants about
spurious matters – “someone’s pinched my wheelie bin, the neighbours keep
parking in my space, there’s been a power cut on my street and the freezer has
defrosted” etc etc. The landlord is paying us to manage the property, not to
bore him with things like this, so we deal with them without telling the
landlord. A landlord that manages the property himself would have to deal with
all this personally.
2.
we manage “difficult situations” on behalf of the
landlord. If a tenant phones up on Monday morning, stating she’s split up with
her husband and he needs to pay the rent from now on, we know what is legally
correct and legally permissible. As such we know the correct response. It’s the
same with the situation described by the landlord above – “no one has fixed the
lights in the communal area, so I’m not paying rent” – we know what’s
permissible and advise both parties accordingly. If you self manage, and you
end up in a situation like this, you either have to muddle on through, or
consult a solicitor which will cost far more than a lettings agent’s monthly
fee.
3.
we inspect the property so you don’t have to. This needs
doing for a landlord’s protection, but it also needs handling in a sensitive manner.
We’ve had 4 tenants give notice this year after a landlord has conducted their
own inspection (one with a clipboard!) and both parties have fallen out as a
result. In all 4 cases the property has needed no work when the tenancy ended
(ie. whatever the landlord was raising as an issue wasn’t a genuine issue) and all
4 cases the landlord will have lost money as the result of needing to re-let. Having
a third party such as an agent conduct the inspection means that landlord and
tenant don’t end up falling out over minor matters.
4. we deal with problems out of hours. Sooner or later your
tenant will lock themselves out and need letting in, or will find a small leak
on a Sunday and demand an emergency plumber. They’ll want someone there
immediately, whereas you won’t want to pay an emergency call charge, and leave
the job until Monday. A decent lettings agent resolves this and manages
expectations.
Managing a tenancy isn't usually difficult. Because of the checks agents do up front, rarely does a fundamentally rogue tenant end up in a property, and as such rarely is in depth legal advice required. However tenancies can go wrong, tenants can be over demanding, and the law of landlord and tenant is very much stacked in favour of the tenant. As such a novice landlord who tries to manage themselves can get into difficulty, especially if faced with a "know it all" tenant. For that reason about 85% of our landlords ask us to manage the property, and the ones that don't tend to be the larger investors with multiple properties, who are geared up to handle tenant issues.
Richard.
