Letting Agent Fees

[rubyred81]

I've never leased a commercial property before, so I just want to check if what the letting agent is doing/advising is normal practice. We have paid a security deposit of £2700, 3 months rent on a retail premises. The letting agent has added £1500 admin fees, £300 vat and £900 for a months rent in advance. I have asked for a copy of the lease in order for my solicitor to look it over and negotiate terms. The letting agents are asking for our terms first and have advised that they will deal with the lease and advised that we won't need a solicitor.
I find this strange as I won't sign the lease without my solicitor checking it. My questions are: Are the admin fees part of the process and does the letting agent usually negotiates between tennant and landlord?
The current tennants are leaving the property on the 13th of this month and I feel they want to escalate the process so the landlord doesn't lose rent, he's already said no to rent free period, we were hoping for 2 months. Any advice would be appreciated.

 

[Mark T Jones]

I would instantly mistrust anyone who doesn't want you to take legal advice.

 

[DontAsk]

The letting agents are asking for our terms first and have advised that they will deal with the lease and advised that we won't need a solicitor.

That's BS. Is this a "high street" agent? Run away, but you might lose your £2700.

 

[pentel]

You should have had a copy of the lease before to have reviewed by your solicitor before paying any money over.

Hopefully there is some kind of document advising the terms of the "security deposit" and hopefully it is refundable.

 

[fisicx]

I have asked for a copy of the lease in order for my solicitor to look it over and negotiate terms. The letting agents are asking for our terms first and have advised that they will deal with the lease and advised that we won't need a solicitor.

Find another agent. This one is telling you fibs. Probably because there is something in the lease that could delay the process. Hopefully you will be able to get all your money back.

When you find the next agent get hold of the lease before handing over any money and don't sign anything until your solicitor has reviewed the documents.

Do not be rushed into this. It's not your concern if the landlord loses rent.

 

[rubyred81]

Find another agent. This one is telling you fibs. Probably because there is something in the lease that could delay the process. Hopefully you will be able to get all your money back.

When you find the next agent get hold of the lease before handing over any money and don't sign anything until your solicitor has reviewed the documents.

Do not be rushed into this. It's not your concern if the landlord loses rent.

They have told me that I'm to submit my terms to them and if the landlord agrees they'll draft the lease, They've said the £1500 admin fee is for them to prepare the lease and inventory of the property. The trouble is the property is exactly what we want and in the right location, so I don't want to back out and risk losing my deposit and then have to start looking again. They're a genuine company or so it seems, but definitely trying to escalate it not for the landlord to lose out, but as you said its not my problem. I didn't expect to be hit with a bill for the lease, that was a shock to find out we have to pay for that, I've found out since I first posted that it does fall on the tennant to pay

 

[fisicx]

No. You get your solicitor to draft the lease.

 

[rubyred81]

No. You get your solicitor to draft the lease.

Would you know if I am liable for the £1500 admin fee that they've billed me for? This is the issue that I'm really confused about, is it normal practice for letting agents to add on these fees to tennants, I know in the private sector its not allowed

 

[fisicx]

They can charge whatever they want. Each agent will be different. You major concern should be the lack of a lease to review and legal oversight.

For all you know the lease could make you liable for a complete renovation of the property and a monthly bill for access and parking.

 

[Mark T Jones]

They have told me that I'm to submit my terms to them and if the landlord agrees they'll draft the lease, They've said the £1500 admin fee is for them to prepare the lease and inventory of the property. The trouble is the property is exactly what we want and in the right location, so I don't want to back out and risk losing my deposit and then have to start looking again. They're a genuine company or so it seems, but definitely trying to escalate it not for the landlord to lose out, but as you said its not my problem. I didn't expect to be hit with a bill for the lease, that was a shock to find out we have to pay for that, I've found out since I first posted that it does fall on the tennant to pay

Rule # 1 - never fall for a property. There is always another around the corner (metaphorically)

Rule # 2: get all costs and process laid out clearly between you, before you start splashing cash. (Or new, in this case)

Rule # 3: if it doesn't smell right now, leg it. It won't get any better

 

[Paul Kelly ICHYB]

Walk away.

You have to see the lease first and get it checked over - not doing so, especially if they don't want you to see the lease means?.

Whilst it probably happens, I would not pay the landlords agent fees - the land lord pays the agent to manage the property.

 

[Sil_14]

I think there's a big misunderstanding in this thread. @rubyred81 the terms must be agreed between you and the landlord BEFORE drafting the lease. You simply submit what's called "heads of terms" listing the fundamental terms before you instruct your solicitor. Terms will include rent, free-rent period, length of the lease, break clause etc. Before sending the terms, speak to you solicitor, he will be able to list the terms for you as each case if different. You then email them to the agent and they will come back with the landlord's terms. That's the negotiation phase. Once both parts agree on the final terms, each part will then instruct their own solicitors, and the lease will be drafted by the landlord's.

I can't comment on the letting agent fees as I have not been charged any, but you can always negotiate. When I signed my lease, I had a difficult time with the letting agent but was able to go above and deal directly with the landlord. Are you in contact with the landlord?

 

[rubyred81]

Walk away.

You have to see the lease first and get it checked over - not doing so, especially if they don't want you to see the lease means?.

Whilst it probably happens, I would not pay the landlords agent fees - the land lord pays the agent to manage the property.

Yes I will see the lease, they are asking for my terms first to put to the landlord.

I think there's a big misunderstanding in this thread. @rubyred81 the terms must be agreed between you and the landlord BEFORE drafting the lease. You simply submit what's called "heads of terms" listing the fundamental terms before you instruct your solicitor. Terms will include rent, free-rent period, length of the lease, break clause etc. Before sending the terms, speak to you solicitor, he will be able to list the terms for you as each case if different. You then email them to the agent and they will come back with the landlord's terms. That's the negotiation phase. Once both parts agree on the final terms, each part will then instruct their own solicitors, and the lease will be drafted by the landlord's.

I can't comment on the letting agent fees as I have not been charged any, but you can always negotiate. When I signed my lease, I had a difficult time with the letting agent but was able to go above and deal directly with the landlord. Are you in contact with the landlord?

Thank you for the information. The landlord doesn't want to have contact with the tennants apparently, he wants us to deal with the letting agent. They want me to submit my terms, then they'll put it to the landlord, and I suppose it'll be back and forth until we both agree. I'll then get it checked over with a solicitor before we sign anything. The letting agent said the £1500 is the cost of preparing the lease etc; and in commercial leases it usually falls on the tenant to pay. They've said he's looking for a long term tennant and is happy to include a break clause.

 

[Sil_14]

Also, the security deposit

Yes I will see the lease, they are asking for my terms first to put to the landlord.

Thank you for the information. The landlord doesn't want to have contact with the tennants apparently, he wants us to deal with the letting agent. They want me to submit my terms, then they'll put it to the landlord, and I suppose it'll be back and forth until we both agree. I'll then get it checked over with a solicitor before we sign anything. The letting agent said the £1500 is the cost of preparing the lease etc; and in commercial leases it usually falls on the tenant to pay. They've said he's looking for a long term tennant and is happy to include a break clause.

If the current tenant is leaving on the 13th, it probably means that the agent/landlord have been struggling to secure a new tenant during the notice period. I would personally ask for the landlord to cover his own legal fees as you will with yours. The agent is only pushing, push him back but like in any negotiation, be prepared to walk away if the terms are not in your favour. If the agent feels that you're desperate for these premises, he'll do his best to milk you. It's uncommon nowadays (but it can happen) for a landlord to charge the tenant for his legal fees.

As a reference point, on my premises, the letting agent asked me to put my house as a guarantee. I had to keep a poker face but I wanted to laugh. I'm a risk-taker but not a gambler. Negotiation eventually moved down to a 3 months' rent security deposit.

 

[rubyred81]

Also, the security deposit

If the current tenant is leaving on the 13th, it probably means that the agent/landlord have been struggling to secure a new tenant during the notice period. I would personally ask for the landlord to cover his own legal fees as you will with yours. The agent is only pushing, push him back but like in any negotiation, be prepared to walk away if the terms are not in your favour. If the agent feels that you're desperate for these premises, he'll do his best to milk you. It's uncommon nowadays (but it can happen) for a landlord to charge the tenant for his legal fees.

As a reference point, on my premises, the letting agent asked me to put my house as a guarantee. I had to keep a poker face but I wanted to laugh. I'm a risk-taker but not a gambler. Negotiation eventually moved down to a 3 months' rent security deposit.

That's crazy to expect you to put your house up as a guarantee. I definitely think they are trying it on with us, I am going to email tomorrow and query about the charges again. I won't be rushed and I know that's what they're trying to do. I really appreciate your advice, thank you.

 

[pentel]

The letting agent said the £1500 is the cost of preparing the lease etc; and in commercial leases it usually falls on the tenant to pay

In my experience each side pays their own legal fees.

Landlords will ask for this but it is one of the easier terms to push back on.