Tenant Reservation Fees Is A Con! Do NOT Fall Victim!

I have to agree with you - Donnie Darko is a bullshit movie big time!!

Yes, I didn't get Donnie Darko at all. But I was impressed with Patrick Swayze, he played the creep really far too well - maybe he was a good actor after all?

After driving halfway across the country at the crack of dawn to ensure my partner and I got stung like this yesterday. We paid our £300 fee and met the landlord, who told us he was going to see the other couple an hour later and then choose who he wanted to move in.

According to Northwood Lettings, this is not illegal, however they do not actively practice it either. Hm.

Hello Philippa Lyden,

Read your agrement with Northwood carefully. If you've bought the right to have an exclusive option to rent the property and you've not been given that right then you have been defaruded. It's a crime of Fraud under the Theft Act.

Your easiest remedy is to demand the money back from Northwoods. Being a franchise this comes out of the branch manager's pocket, so they're not going to be helpfully explaining your rights to you. But they have a Head Office complaints dept and are in teh Property Ombudsman, so I think you've got a really good chance of getting your fee back.

They, in turn, should have a tight enough agreement with their landlord that they can recover the compensation you are due from him, as he has obviously mucked them about just as much as you.

Hope this helps.

It depends whether it is a holding/reservation fee or an administration fee or a deposit, and that partly depends on how much money they are asking for.

In my opinion, if the sum requested is say £ 100 then it could be said to be for administration in setting up the tenancy (depends on what other charges there are to be levied). If the money is taken and then put against the first months rent when the tenant moves in, then it is a reservation fee. If it is say half a months rent or more then most should be passed to the landlord if the tenant pulls out. If the money is taken as a deposit then it remains the tenants and should be registered as such.

The moral of the story is read the T&c's before you commit to signing or paying for anything and avoid a landlord or agent who either doesn't have clear t&c's or isn't a member of an organisation to who you can refer if there is an issue. Yes, these proper agents may well be more expensive, but if you want cheap, you'll get cheap!

There are a number of names for the fee you are talking about. Reservation, Holding or more appropriately the administration fee.

The fee is taken as a demonstration of intent on the part of the tenant. Put it this way a tenant is much less likely to waste time offering on multiple properties if he actually has to put money down to confirm interest.

The administration fee is used to pay for the admin in setting up the tenancy. Usually for the references, their portion of the tenancy agreement cost, offer letters, check-out fee and various other costs.

While Letting Agents are an easy target, there is a massive amount of paperwork involved if the job is done correctly. (Much more than a Landlord renting out privately needs to do). Naturally we get to hear the "but all you do is press print" comment all the time. However we have lost many members of staff who could not deal with the degree of administration required with a backdrop of ignorant Landlords and Tenants refusing to believe any work was being done as a result of whistle blowing programs that tarnish all agents with the worst examples. To propose that having done this work and the tenants disappearing we should simply give any administration monies to the Landlord does not make a great deal of sense. It sounds like you are looking for charities to run letting agents, not businesses.

In any event the consumer has protection in this area. The OFT requires that an administration fee cannot simply be withheld, there needs to be evidence of work and cost incurred for any monies to be retained by the agent.

The example in the video shows a crooked agent. However there are thousands that are hard working and law abiding.

Well, it is true that Estate/Letting Agents are asking this reservation fee. 1: put under pressure, "in case the other person takes the flat" 2:the price for the fee ranges from £50 - £200, every time we are being told, it would come off the deposit once everything has been finalised. 3: you say, you wouldn't go with a Letting Agent who charges this, well, we have been looking at flats for a couple of months now and EVERY agent wants a reservation fee. We have no other option! We were even told that, yes, several people can pay the fee and the landlord will make his mind who gets the place. the people who do not, will get their money back. But that still means one is out of pocket...

Hi,
I have similar problem. I've paid reservation fee in amount of 250£ to Archer Bassett agency which should be deducted from first rent when I become a tenant. Then they passed my application to other agency, cause the above mentioned agency was doing only viewings. I've passed all the checking and referencing, and I've become a tenant. But the second agency didn't know anything about the reservation fee I've paid to first, and I had to pay all rent and all deposit. That's way I've lost 250£ I should have got back. What should I do to get my money back? The papers I've receive from archer Bassett says bold that I should get that money back when I became a tenant.