Agent fees

Agents’ fees are the charges you pay a letting or managing agent for services such as finding tenants, referencing, preparing agreements, collecting rent and managing repairs. They are usually set out as a percentage of the monthly rent or as fixed fees for specific tasks. For example, a tenant-find only service versus full management.

From a landlord’s perspective, agents’ fees are a business cost or expense, not something you can lawfully pass on to tenants in England beyond the narrow list of “permitted payments”. Under the tenant fee rules, carried forward and reinforced in the Renters’ Rights Act, most up-front charges to tenants for things like referencing, inventories, renewals or check-out are banned. That means the agent should invoice you, not the tenant, for their work.

Good practice is to:

• Get a clear written breakdown of all fees, including VAT and any renewal or sale commission.

• Check how and when you can terminate the agency, and what exit fees apply.

• Confirm how the agent’s compliance responsibilities are divided between you. For example deposit protection, safety checks, redress membership.

Excessive, hidden or double charged agents’ fees can undermine profitability and may also create legal risk if they lead to disguised, unlawful charges to tenants.