by Rachel Crook
Many landlords may find that it is better to arrange tenancy agreements and find tenants for their properties themselves, following advice from one website about the fees that can be incurred when doing business with a letting agent.
According to Landlordzone.co.uk, landlords should ensure that they fully understand any contracts they sign and be prepared to negotiate "where necessary" as renewal fees can always be discussed.
One way for landlords to solve this problem may be to go online and purchase tenancy agreements for themselves, which avoids the problem of hidden costs.
Discussing the issue, Tom Entwistle, editor at Landlordzone.co.uk, warned that some agents will try to charge landlords the full cost for a renewal, meaning it will be as expensive as the original setting up of the tenancy.
He advised those considering renting a property or renewing an existing tenancy to "be sure as to what you are actually committing yourself to".
Furthermore, they are reminded that the documents involved are legal contracts which need to be read and drawn up carefully.
This advice comes as the National Landlords Association (NLA) has revealed that over 70 per cent of landlords consider the renewal fee charged by letting agents to be unfair, with many in London and the south-east being charged fees of around 11 per cent.
According to the organisation, the continued economic downturn in the UK means that landlords should strongly consider other options and establish ways to reduce their operating costs.
John Socha, vice chairman of the NLA, said: "If letting agents don't stop charging these money-for-nothing fees, landlords should avoid using their services. It is as simple as that."
Another reason why landlords may want to arrange rental agreements and contracts themselves is because of the commission which can be taken by a letting agent should the tenants decide they wish to purchase the property.
Mr Entwistle explained: "One clause, which is quite onerous and is sometimes put in by a letting agent, is that if a landlord were to come to an agreement to sell the property to the tenant then the agent would get a sales commission similar to an estate agent.
He claimed that this is something landlords need to be aware of in case they do come to a sales agreement with the inhabitants of their property and do not want to lose out to a third party.
Although it may seem unfair to some people that letting agents can make these charges, there is no law that Mr Entwistle is aware of to prevent them from doing so.
As a result, it is the responsibility of the landlord to ensure they are aware of such fees because it is a commercial arrangement.
It may, therefore, be advisable for those entering the rental market to draw up a DIY tenancy agreement so they do not have to concern themselves with the various extra costs.
Published on: February 6, 2009