The dumber-than-dummies guide to letting agreements
Disclaimer: This article is not suggesting you skip the small print on letting agreements. This article is merely highlighting the most important terms to check on a letting agreement.
Does anyone else hate reading the small print on important documents?
Cool. Does anyone actually read the small print on important documents?
*The crowd goes silent, accept for those analytical types*
I mock you but really I am jealous of your due diligence and focus.
Secret confession #1: When given a contract, my eyes wash over the text and absorb nothing. I know I should read it but it’s easier to lie to myself and say “Don’t worry brain, these are good people and this is a standard contract. Just skip to the end and sign.” So that’s what I do.
Secret confession #2: When asked by a member of my team if I read the small print, I flat out lie “Umm YEAH… of course I did. Ok, well, I better go now. Lots of work to do, so bye!” And I run away fast!
Skip forward 3 weeks. “Jess, why has only £775 gone into our bank instead of £1175?” Errrrrrr, let me check the ASTs (Assured shorthold tenancy) that had been sent in the post a week ago… Shit. Bollocks. Shit. Everything has broken and it’s all my fault.
Based on my errors (of which there are plenty), I bring you, The dumber-than-dummies guide to letting agreements. The key terms you MUST you read in the small print before signing.
1. Check the rental amount you have agreed
This is going to sound stupid.
The first letting agreement I ever signed I did not realise the rent amount was meant to be written on it. Because I did not know this, I did not realise the letting agent had left it blank.
A few weeks later, once the property was tenanted and the rent amount had come into the bank I was horrified at the amount transferred. It wasn’t even market value.
2. Check the letting fee
Letting fees are always negotiable. After a long drawn out negotiation with the letting manager a lower letting fee was agreed. I even followed it up in writing. When signing the contract [with the lettings assistant] I noticed the letting fee and explained that the letting manager and I had negotiated something different. This person said, “OK, just sign the contract anyway and he will deal with it.” There goes little naive me saying “Ok. That sounds great.” as I signed the contract from la la land.
When this letting agent sent me the funds with the letting fee deducted I was not happy. I queried it and his response ‘I have looked at the management agreement you signed and the letting fee is 65%. I attach herewith a copy detailing the fee.”
Cheeky f*****. He full well knew what we agreed. Especially as we made a big point about it!
Clearly a man with no integrity; but that is not my issue. My issue is my lack of assertiveness and naivety.
Now if something has been negotiated, I don’t bother questioning it on the contract. I go straight ahead and amend it myself. This is my business, my money, my contract. If they don’t want to keep up their side of the negotiation, fine. I know what they are like and it is my choice if we do business again.
3. Check your package
I wish I was suggesting you grope yourself in a letting agency, unfortunately I am not. Check whether they have assumed you want the fully management package or let only. If fully managed, what are the exit fees? Luckily this was the one thing I did double check. Some
dickheads agents try and get away with whatever they can. Even if you had told them you want ‘Let only’, they may have ticked the Full Management box ‘by accident’. Just be careful and double check this.
Before you sign any letting or management agreement make sure you check all the percentages and fees (including exit fees). Once you have scanned the agreement for the percentages and fees, ask the agent to point out all the fees too, in case you missed any.
- Check the rental amount (MAKE SURE THIS IS WRITTEN ON THE AGREEMENT)
- Check the letting fee
- Check your package
If you enjoyed reading this blog and want to help someone else with my dumb stories/learning curves, please share this with someone who’ll enjoy this.
Here are some more mistakes I’ve made so you don’t have to:
- What to do when rent arrears a rears it’s ugly head: My simple solution to an annoying problem
- How to get a landlord into bed: Here are all my stories about trying the make students happy (not like that!)
- The real problem with “problem” tenants is YOU! How to ensure you get the best tenants possible