Letting agents act on behalf of landlords and in most cases they are paid by the landlord.
What do letting agents do?
There are various different types of letting agencies. Some just find tenants for properties (these are often known as accommodation agencies). Others manage properties on behalf of landlords and the tenants may never have any direct contact with the landlord. It is common for estate agents to have a lettings department.
Letting agencies often:
- find a tenant for a property
- collect rent
- manage the property for the landlord
- arrange repairs
- provide tenancy agreements and inventories.
Choosing a letting agency
Check if the letting agent or estate agent you use is a member of a professional body. It shows the agent has agreed to a voluntary code of conduct and professional standards.
The main professional bodies are:
- the Property Ombudsman Scheme (TPOS)
- the National Approved Lettings Scheme (NALS)
- the Association of Residential Letting Agents (ARLA).
Each of these organisations lists its member letting agencies on its website.
If your landlord uses a letting agent to manage its’ properties, then the agent must be licensed under the Rent Smart Wales scheme. Don’t be afraid to ask the agent if they have a licence. If they do then they must keep to the requirements of a Code of Practice and can face penalties if they don’t comply. See our pages on Landlord registration and licensing for more information.
How do letting agencies work?
You need to register with a letting agency before they offer you any accommodation. You can register with more than one agency at a time. They will need to know what sort of accommodation you are looking for and how much you can pay.
Once you are registered agencies normally let you know when suitable accommodation becomes available. When a property is found arrange to view it as quickly as possible.
What should I ask the letting agency?
Before agreeing to take accommodation from a letting agency find out:
- what the agency does on behalf of the landlord
- if they have a licence (or have applied for one) under the Rent Smart Wales scheme
- what sort of tenancy agreement they are offering
- how long you can stay
- what charges you will have to pay before you move in
- how much the rent is and how often it’s paid
- how the agency wants the rent paid (for example by cheque or standing order).
What do agencies charge?
Some agencies don’t charge tenants at all. However they may charge for drawing up tenancy agreements, providing inventories and for administrative costs such as phone calls and postage.
You shouldn’t have to pay any fees until the agency has found a place for you. It is a criminal offence for an agency to charge you just to register or for supplying addresses and details of accommodation. Don’t pay any fees until you’ve been offered a place. There may be other agencies that can help.
Letting agents must display the fees they charge to both landlords and tenants. These should be clearly on view at the agent’s premises where people are likely to see them, and on their website if they have one. You should not have to ask to see them. This should make it easier to work out exactly what an agent is charging you for and whether you think the fees are reasonable.
The list of fees must include a description of each fee so that you can understand what it’s for and whether it applies to the property as a whole or to each tenant who may move into the property. VAT should be included in the figures shown.
It is good practice for agents to check that customers have seen the list of fees before they enter into a tenancy agreement.
The list should be clear and easy to understand. Vague terms like ‘admin fees’ are not allowed and you should question exactly what they mean.
Letting agents do not have to include the following on the list of fees:
- rent payable to a landlord
- a tenancy deposit
- any fees, charges or penalties which the letting agent receives from a landlord under a tenancy on behalf of another person.
A letting agent can be fined up to £5000 if they do not comply with rules. They also risk losing any licence they have. If you believe an agency is acting illegally tell your local council’s tenancy relations officer or contact Rent Smart Wales who can investigate for you.
If you find a property you like, the agency may charge a holding deposit while they take up references. This should be deducted from the amount of rent in advance or deposit you pay once your references come through. The agency might ask for references from your employer, bank and/or previous landlord.
If you don’t move into the property you may lose the holding deposit. If you think the agency has unfairly kept your money get advice. You might be able to claim it back in the county court.
If you do move in the agency will probably ask for a deposit (usually one month’s rent) and the first month’s rent in advance. The amount of deposit and rent in advance required can be more than this, especially if the letting is going to be for a long period of time or if the property is of high value.
Does it matter if I am claiming housing benefit?
Some agencies won’t accept tenants on housing benefit. Housing benefit is paid four weeks in arrears. You may therefore need to find the first month’s rent yourself. Housing benefit will not cover the deposit or any agency fees.
You can find out the maximum amount of housing benefit you can get before you move in by checking the local housing allowance for your area.
We are sorry that we cannot provide this information in Welsh, however if you would like to speak to an adviser in Welsh please contact 0345 075 5005.