Estate agents are forcing landlords to pay hidden charges and high costs to arrange property servicing and maintenance work through contractors, according to a report in the Telegraph. In some cases, they charge a whopping six times the price for simple services such as gas safety inspections, tenant referencing and deposit protection.
Usually, buy-to-let landlords who turn to estate agents to take up the management of their properties are charged a monthly fee equalling 15% of their rental income, which covers services like finding tenants, arranging rental agreements and taking responsibility for the property’s maintenance. But in addition to this fee, estate agents inflate contractors’ bills by up to 20% to make a profit, as well as demanding reductions of up to 60% from contractors for their services. Estate agents do not clearly communicate these charges with landlords, who ultimately pay the bill.
But agents’ practices of taking a “secret commission” from the contractor is the more concerning problem, according to industry experts. There are agents seeking particular contractors who are likely to consent to high commissions (in some cases reaching up to 60%), promising large volumes of work in return.
Landlords expect agents to have their best interests in mind, but in many cases quality is the last thing that concerns them – they choose the contractor who will pay the best commission.
Have you ever been stung by hidden agents fees?