Taking over lease from letting agents

shergar13

Hi, my contract with my letting agent is finishing soon and i havent had any problems with the tenants over the term of the contract. I'm thinking of taking over the letting myself rather pay the letting agency 12.5% just to transfer money to my account. Has anyone else done this, i havent approached the tenant yet but i cant see any problem with them switching over. Their terms will be exactly the same. I'm just wonder can the letting agency make it difficult or once the contract is up can we just both part company with each other. Any taughts or suggestions would be much appreciated.

Mrs OBumble

I asked my landlord if he's considered doing this - and he had.

He split the difference with me in terms of what he'd saved in fees.

The only thing you need to watch is the deposit: it needs to be released by the agency to you, and the agency will need a letter from the tenant authorizing this.

Also, you need to get yourself a list of chattels and ideally evidence of the state of the place at the start of the tenancy ... the agency may not give this to you though. So you may just have to take photos now.

Technically there may be an issue for the tenant in terms of part 4 conditions and when the lease starts ... I don't know, but as a tenant I wasn't fussed. It depends if yours is or not. But if youv'e had a good working relationship on both sides this may not be an issue.

shergar13

I presume if i speak to the tenant and their happy to go with it. I could then contact the letting agent and tell them that i will be finishing with them when the contract is up and have the tenant do the same, there shouldnt be an issue or anything the letting agent can do?? I dont think i'd have an issue with holding on a week or so for the tenant to have their deposit returned from the letting agent before they can give it to me. As you said i can drop their rent so they save and im up money. We just cut out the middle man, that as i said basically "click send" once a month.

odds_on

Have you checked with the tenant to see if he is staying for a further period or if he is moving out?

If tenant is staying, does he want another fixed term lease or go onto a Part 4 lease?

Ensure that you have received the tenant's deposit from the agents (they may have kept this as either their payment for the first year's work, retained it to be returned to the tenant at the end of the tenancy or transferred it to your account. What ever happened, you, as landlord are responsible for the deposit.

Advise the tenant, in writing, that you as landlord will now be dealing with the entire rental process.

Provide, in writing, the tenant with an emergency contact number and with an address to which any legal documents may be sent.

Get the tenant to set up a direct debit for the rent.

Download, read and inwardly digest the Residential Tenancies Act 2004.

djimi

Mrs OBumble wrote: »

Technically there may be an issue for the tenant in terms of part 4 conditions and when the lease starts ... I don't know, but as a tenant I wasn't fussed. It depends if yours is or not. But if youv'e had a good working relationship on both sides this may not be an issue.

I dont see why there would be any issues regarding the tenancy? The actual tenancy is not affected; as far as the tenant is concerned nothing really changes; they just have to be notified of the change of agent and change of bank account details if necessary.

cson

In my experience the vast majority of letting agencies are parasites and any educated savvy landlord would be much better off letting without using one.

Penguino

shergar13 wrote: »

I presume if i speak to the tenant and their happy to go with it. I could then contact the letting agent and tell them that i will be finishing with them when the contract is up and have the tenant do the same, there shouldnt be an issue or anything the letting agent can do?? I dont think i'd have an issue with holding on a week or so for the tenant to have their deposit returned from the letting agent before they can give it to me. As you said i can drop their rent so they save and im up money. We just cut out the middle man, that as i said basically "click send" once a month.

12.5% to a letting agent seems pretty high to me. Also why would you lower the rent just because you are managing the property now?

D3PO

Penguino wrote: »

12.5% to a letting agent seems pretty high to me. Also why would you lower the rent just because you are managing the property now?

yeah that's a crazy notion. Your job is not to pass on savings to the tenant by taking on extra work its to increase your investment.

Especially as your will be increasing your tax liability in doing so as EA fees are tax deductible.

So if you saved €100 a month in EA fees your real savings are actually only about half that. There is no logical reason to pass on any savings to a tenant here. A LL's time is worth money aswell after all.

djimi

I dunno, landlords are generally quick enough to want to pass additional costs onto the tenants in the form of a rent increase (as is their right to do so), so I dont see why its such an outrageous notion for them to lower the rent slightly if those costs decrease?

D3PO

djimi wrote: »

I dunno, landlords are generally quick enough to want to pass additional costs onto the tenants in the form of a rent increase (as is their right to do so), so I dont see why its such an outrageous notion for them to lower the rent slightly if those costs decrease?

costs decrease and workload increases.

The tenant gets the benefit of not having the bureaucracy of dealing with an EA who if you can even get hold of them, which most of the time you probably cant probably cant sort your problem without having to clear it with the LL adding time and frustration to a tenant who needs something sorted.

So the tenant still benefits there is no reason to see them benefit financially from it aswell.

Unless your advocating that its reasonable for a LL to increase rent for taking on an EA then I don't think you can argue that it should be taken off for moving away from one.

djimi

Im simply saying that if this was the other way around and if the cost of the tenancy were to rise for any reason then I dont think many would say that it is unreasonable to pass that cost onto the tenant, so I dont see why it shouldnt work both ways. Im not saying that the landlord is obliged to decrease the rent in this situation, its entirely up to them, but if they can afford to them fair play to them as far as Im concerned.

The way the OP is talking it doesnt sound like the agent did much bar collect rent anyway, which can be easily automated, so the work load might not even increase that much for them.

djimi

D3PO wrote: »

The tenant gets the benefit of not having the bureaucracy of dealing with an EA who if you can even get hold of them, which most of the time you probably cant probably cant sort your problem without having to clear it with the LL adding time and frustration to a tenant who needs something sorted.

I would actually disagree with this. I have always rented through an agent, and our issues seem to get sorted much quicker than those I know who deal with the landlord direct. Only the couple of relatively major issues we have had has the agent needed to run it by the landlord first, and in both cases they got a response and the go ahead within 24 hours. The agents will generally have a network of people they deal with to sort various issues and will be more proficient in getting issues sorted. Dont get me wrong, Im sure they are not all wonderful, but any I have dealt with have been perfectly fine.

Based on this, I dont see how its going to be much of a benefit for the tenant to deal with the landlord direct, unless the agent was completely useless, in which case the issue lies with that specific agent and not with the notion of dealing with an agent in general. To be perfectly honest, as a tenant I think Id prefer to deal with an agent and would be somewhat apprehensive to find that the landlord was taking over dealing with the place themselves.

Mrs OBumble

D3PO wrote: »

costs decrease and workload increases.

How much does workload increase, really. This depends on type of cotnract, but it may only be the time it takes to check that one standing order has paid into your bank account each month.

In my case, if I had a problem, I called the agent who called the landlord who organised the repair. The agent was nothing my than a phone service.

Now for my overseas property, it's quite different: as well as lettings and void inspections, the agent actively manages any fixes and does quarterly insepctions includiing taking photos for me, and well as monitoring payments and preparing me a findancial report that feeds straight into my tax-declaration. Well worth their 11%. But as a tenant here, the agent appeared to by 9/10th of nothing.