UKH

The financial advice I see on UKC usually beats most other dedicated sites so here goes...

I live away from my house and rent it out via a letting agent. Having had some work done the invoice shows 'letting agent commission' at 20% on the invoice from the firm that did some work following a fault. Phone calls made and it appears the contractors who are brought in to do work for this firm have to pay the letting agent to be on their list of contractors. They then have to recover this payment by adding a sum to invoice. This sounds incredible to me as I thought I paid the letting agent a % of rent each month to do things like getting in a contractor when a problem arises?

Is this normal and am I niaive as to how things are done now? I was already not a big fan of this large firm who bought out the old firm I used with my tenants in place, and I shall try to find any paperwork they sent to see if it is hidden in T&Cs somehow.

In reply to gneiss boots:

I cant say whether it is common / normal or not - all I can say is that the managing agents i use for my properties includes this in their fees. The only time i've had to get work done via them they emailed me the contractors quotes to see if it was acceptable to me, and then a copy of the contractors invoice. Venture properties, based in County Durham. Decent types, it appears.

In reply to Ian W:Thanks. It struck me as odd but so much of what you get charged for nowadays seems to have become normal as an extra cost.

In reply to gneiss boots:

I am not a lawyer and indeed have no experience of this stuff, and of course I have not seen your T&Cs, and the bottom line for sake of managing expectations is “expect the worst”, but this sounds almost like fraud/extortion (I am sure that, legally, it’s not). 

It sounds like this 20% should be swallowed by the constructor, it is a fee they pay to your agent in order to be first/exclusive choice for work. Passing that charge on to you is a bit like a making you pay for their marketing . 

In reply to gneiss boots:

Letting agent only uses contractors who pay for the privilege... I bet that results in a high standard of work.

I also suspect that the contractor wasn't supposed to list the commission as a separate line item, but did so anyway, because they don't like it. 

In reply to gneiss boots:

My experience:

I let out my house through an agency. When something needs done they always e-mail me to ask if they can go ahead and do it essentially. Out of maybe 6 or 7 things so far, I've taken responsibility for every one except one. I arrange my own gas checks with a guy I've used before and is very reasonable - his rates are considerably less than the agency quoted for the job, I've done some DIY stuff myself, I've arranged for delivery and installation of new appliances myself and I've chased up contractors whose job developed faults after completion myself.

The only occasion I just told the agency to get on with it because I was abroad, I ended up with two bills from different companies for the same job, the first of which was basically "we couldn't fix this, you need a more serious contractor with more serious equipment" and the second more serious contractor was, predictably, quite expensive. I was pretty hacked off at the time but who can say if I would have managed to get it done any cheaper myself.

Everything leaves me with the bottom line feeling that getting the letting agency to get contractors to do something is exactly like getting the government to get contractors to do something: The middle man, who isn't really paying the money themselves, has little motivation to look for a good deal and every motivation to have a standard operating procedure which makes sure things go smoothly and don't become a debacle (while obviously notionally searching for competitive rates for a job so they can justify the expenditure).

So you have the choice: Leave it to the agency and accept that you will pay more for the privilege or take it on your own shoulders, save some money but know that that will be at the expense of a certain amount of your time and worry.

Which rather begs the question "wait, what am I paying an agency for then?!" to which my answer would be:

1) To find tenants, vet them, collect the rent, inspect the house on occasion and filter out spurious complaints while passing genuine ones on to you, the owner.

2) Insurance and insulation against non-paying/squatting/otherwise disaster tenant situations.

With number 2 basically being THE reason for me - if my tenants turn out to have been imported directly from hell, I should be completely insulated; my rent will continue to be paid even if the tenants are not doing so, legal costs covered, agency does all the legwork in progressing the reclamation of the property and house insurance  reimburses any big repairs if they trash the place.

In reply to Blue Straggler:

Sorry, should be "for the sake of"...

Sorry, it looks like some aggressive attempt at "autocorrect" transformed the contractor into a constructor and I didn't spot it. 

In reply to Blue Straggler, Jack B, henwardian:

thanks all. Sad world isn't it? We got the impression that contractor not a fan of arrangement and this looks to be final nail and we need to find a new letting agent to help with matters as henwardian covers well and because geography and work will stop efforts at diy ( should a fault develop it should be fixed asap - it is what I would expect as rent myself)

In reply to gneiss boots:

The letting agency I use don't add anything over their agency fees, and neither do their contractors when work is done. 

Check your contract and consider changing agents.

In reply to gneiss boots:

You are already paying the agency.  However it appears common for agencies to expect a little backhander from tradesmen.  Normally you won't see it on the bill as such.  I expect the agency has really annoyed them.  20% is a lot.  A lot of agencies seem to take the p!$$.

In reply to Ian W: and OP.

We use GSC, had to manage them a bit at first. Now they have a list of our preferred local contractors for different jobs. Apart from emergencies if they veer off the list or it's high value work they must ask first. At first they were using people 50miles away who were then trying to charge mileage etc. 

OP.  

I'd speak to your agent and advice them how you'd like it to work, or you'll find another to replace them. 

In reply to gneiss boots:

Considering where I live there are a couple of very dominant letting agencies managing the majority of rented properties I can see how they could abuse their position and get contractors to dance to their tune if they want to work on their managed properties.

I can't say that I am a fan of letting agents having had very poor experience of them from both the sides of the deal.

In reply to Blue Straggler:

Isn't this what every company does? i.e. your car insurance premium will include a levy to cover the ads on TV etc.

In reply to balmybaldwin:

Yes, you are right. My analogy game has been weak, of late! I tried a while to come up with something here, and that was the best I managed and as you say, it's not quite good enough. Thanks for pointing it out. 

In reply to gneiss boots:

Sounds very annoying, but it looks like the contractor is being unusually honest and open about it, rather than just quoting high and not telling you why. Hope you find a better agent. When I found myself renting out a house for a few years I got very frustrated with dealing with agents (also co. Durham area). I tried to remind myself that the cut the agent was taking from the rent was not actually covering that many hours of an employee of the agency - but at the same time it would save everyone a lot of time if they would just do things the first time instead of spending hours on the phone with me haranguing them about it!

In reply to gneiss boots:

Sounds like Finders Keepers, they charge everyone, landlord, tenant and contractor. They charge £70 for a letter every six months to the tenant, to find out if they want to stay for another six months.

we were once charged a shit load of money to fix a plastic blind on a velux window, we weren't given the opportunity to fix it our selves or get it fixed. It was broken when we'd moved in, or at least poorly repair, which we thought the owners had done because they were living there before us.

In reply to gneiss boots:

Letting agents: quality of service is inversely proportional to company size. 

You'll be getting bombarded with offers for insurance next "secure your investment return" etc... 

I'd recommend finding another small independent firm where you can deal direct with known persons. They do still exist. 

In reply to gneiss boots:

Forward the invoice to your letting agent with a message reading 'You Fxxxxing what?!?!??' and links to several of their competitors. 

In reply to Blue Straggler:

It's not marketing though, its blackmail.  If you don't pay us we won't use you.  When the landlord is already paying them to find good contractors. I think they are taking the piss.  

In reply to marsbar:

Yes I already sort of retracted my poor analogy 

In reply to Blue Straggler:

Fair enough.  Didn’t read that bit properly sorry.