Your letting agent probably sends you a statement each month showing your management fee and any other charges. What it may not show is whether anything has been added to the cost of work at your property, such as a mark-up on a contractor’s invoice or a commission the contractor has paid to the agent.
Charges like these aren’t always wrong, but they should never be hidden. Here’s what the rules say, what has happened in real cases, and how to check your own statements.
The key points:
- Letting agents must be clear about all the fees and charges they make.
- Mark-ups on contractor work should be disclosed and clearly shown.
- Landlords have taken legal action to try to recover hidden charges.
- Checking your invoices and getting your own quotes are simple ways to protect yourself.
What the rules say
Government guidance for lettings professionals, published by the Competition and Markets Authority, says agents should set out clearly the fees they charge, and that all fees, including variable or optional ones, should be disclosed in a clear tariff that landlords can easily access. It also says agents must take proper care of their landlord clients’ interests and keep them informed.
On contractor work specifically, Trading Standards has said that agents who mark up contractors’ bills should tell landlords about it and clearly show the amount of the mark-up.
That doesn’t mean every mark-up is a problem. Some large agents openly list a percentage charge for arranging major works in their published fees. The issue is when a charge is added without you knowing about it.
How hidden charges have worked in real cases
Inflating contractor invoices. In a case prosecuted by Trading Standards, a former letting agency franchisee was jailed after inflating maintenance invoices by at least 30%. In one example, a £58.75 electrical inspection was billed at £312.50. Investigators estimated the fraud at a minimum of £200,000.
Taking commission from contractors. In a high-profile London case, landlords alleged that their agent had taken commissions of up to a third of contractors’ fees without their fully informed consent. One landlord found the agent had received around £1,900 in commissions across 38 contractor jobs at his property over roughly two years, none of which appeared on his invoices or accounts. The agent denied any wrongdoing.
Referral fees. Some agents also receive referral fees from tradespeople, which can push up the cost of work.
How to check your agent
The Trading Standards case above started when a landlord asked to see the original contractor invoices. It’s a simple step, and one any landlord can take. You can also:
- Compare the original contractor invoices with what you were charged.
- Check your terms of business for any mark-ups on repair and maintenance work, and what you get in return.
- Check the spending limit your agent can approve without asking you first.
- Get your own quotes to compare against the agent’s contractor quotes.
- Look out for sudden jumps in maintenance costs or vague contractor charges.
If you let your property through a limited company, be aware that some consumer protections may not apply to you, so it’s worth taking extra care when you read your contract.
What to do if something doesn’t add up
Start by asking your agent for a full breakdown of the charges. If you’re still not satisfied, take advice from a solicitor about whether you can recover anything you were charged without your consent.
Landlords have joined together to challenge charges like these before. In the London case above, 55 landlords joined a group legal claim against the agent.
Transparent lettings with Rockett Home Rentals
At Rockett Home Rentals, we take pride in being completely transparent and ethical in our dealings with landlords. We charge no hidden fees or commissions. The management fee we quote is exactly what you pay, with no surprise mark-ups down the line.
You can trust that we will act in your best interest, not ours. We have nothing to hide and will readily provide a full breakdown of all fees and charges related to your properties on request. Choosing a transparent agency like Rockett Home Rentals gives you peace of mind that your hard-earned rental income stays in your pocket.
Want a Letting Agent Who’s Upfront From the Start?
Hidden mark-ups and commissions on contractor work can push up what you pay without you realising. The rules are clear that agents should set out every fee and charge, and checking your invoices, your terms of business and your own quotes is a simple way to make sure yours does.
If you’d rather not have to check, choose an agent that’s open about its charges from day one. At Rockett Home Rentals, every fee is set out clearly before you sign, so you always know what you’re paying and why.
Get in touch with our team today to find out how we manage properties and exactly what our fees include.