Here you will find a range of questions on our Fees and Management Agreement – if it’s not what you were looking for, click one of the menu options below.
Quite simply, because we do not think it’s fair!
Consider this: Landlord A has a 3 bed semi with a rent of £600 per month and Landlord B has the same size property with a rent of £800 per month and the agent is charging a 10% management fee plus VAT. How can it be fair that Landlord A pays a fee of £66 a month while the Landlord B pays a fee of £88 each month? What additional service is the second landlord getting for that extra £264 each year?
We’ll let you answer that one yourself.
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At Letability, we have approached our charges in the good old fashion way. We work out what looking after your property is going to cost us, add our profit margin, and that is the price we charge. With all other things being equal, our Monthly Management Fee for the two properties above would be the same irrespective of the rent charged.
Now, of course, if you have a property with a monthly rent of £400, it may seem that you’ll pay Letability a lot more than the ‘percentage of rent’ method, and on the face of it, it may appear to be the case. But don’t be deceived.
Unlike other letting agents, Letability does not look to continually bombard you with charges for this, that and the other. The majority of costs that you are likely to incur with us are included in the Monthly Management Fee.
And if you have a three-bed semi that commands a monthly rent of £1,200, you are likely to find that the Monthly Management Fee charged by Letability is somewhat smaller than the ‘percentage of rental’ method.
For more information on the unique way that Letability operates its fair ‘all-inclusive’ pricing policy, take a look here. ….. read less
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Letability offers Rent Guarantee and Legal Expenses insurance to give you peace of mind.
It is fair to say that significant losses of rent are rare as are situations where tenants have to be evicted through the Courts. But they do happen. And when they do, the overall loss can quite sizeable. So it makes sense to insure against such events happening to you.
At Letability, we use SJL Insurance Services and you’ll find everything you need to know here.[/show_more]
Aside from the coverage you would expect under a Rent Guarantee policy, Letability provides some extra benefits and you can read about them in the Revolutionary section.
Our view is that, if a cost is likely to be incurred during a tenancy, it is cheaper for you (and us) if we include it as part of the initial Set-up Fee or the monthly Management Charge.
If it is something that only some landlords will experience or want, then we will make a separate charge as and when the costs are incurred. Such additional charges are noted below in the extract from Appendix A of our Management Agreement:
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1. Additional Services which may be included in the fees stipulated in the Landlord’s Agreement at the option of the Landlord.
1.1 Gas safety certificate
It is a legal requirement that certification is carried out at least annually.
1.2 Boiler service (service only offered in conjunction with a gas safety certificate)
It is recommended that this service is carried out each year and is a cost effective option when carried out in conjunction with 1.1 above.
Any repair or maintenance parts and labour that are considered necessary will be dealt with in accordance with Clause 7.2 and will be recharged to the Landlord in accordance with the Schedule of Maintenance Charges (at Appendix C).
1.3 PAT testing
It is recommended that this service is carried out annually.
1.4 Rent guarantee insurance
It is recommended that this service is taken out to provide peace of mind in the event that problems occur (full details available upon request).
Where the Landlord has opted to include any of the above services, the Agent will ensure full compliance with the relevant legislation. The cost of providing the services – where requested – will be included within the Monthly Management Fee.
Where the Landlord has opted not to include any or all of the above services, the Agent can provide them as additional services under Clause 7 of this Agreement upon receipt of a request by the Landlord from time to time.
2. Services which are not included within this Agreement.
2.1 Services not opted into in paragraph 1 above
2.2 Landlord’s insurance obligations relating to the Property and public liability
2.4 Electrical inspection condition report*
2.5 10 year EPC certificate*
2.6 Legionella Testing*
2.7 Inspection visits during void periods (when the property is not available to let)*
2.8 Attendance at court (unless rent guarantee insurance has been selected in paragraph 1 above)
*These items can be requested by the Landlord as additional Services under this Agreement.
The full text of the Management Agreement is available here.
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Yes they do!
At Letability, we try to follow best practice in everything we do and in this case, best practice dictates that our prices should be shown inclusive of VAT at the current rate of 20% – and we think that is fair.
The majority of landlords are not VAT registered so why confuse the issue (or potentially mislead?) by showing a VAT exclusive price?
At Letability, the price you see is the price you pay. If you are VAT registered, we will always provide a VAT invoice so you can reclaim the VAT.
Letability does not manage student properties or HMO’s that require a licence.
In addition, we only offer a Fully Managed service.
None at all.
Fees are not payable until a tenant is found and moves into your property.
However, if you cancel your instruction after you have signed the Management Agreement but before we have found you a suitable tenant, we reserve the right to make a reasonable charge based on the work we have already carried out (under clause 7.7.3).
At Letability, our prices are calculated based on what the services cost us plus a percentage profit margin. And that’s it – a fair price!
If we can reduce the cost of the individual items that make up our charges, we can then reduce the cost that is passed on to you.
For example, Letability does not have a High Street presence because we don’t think it’s necessary. If you want to meet us, that can be easily arranged at a time and place to suit yourself or at our offices in Cardiff. And with technology the way it is, tenants are not visiting shops anymore – they are searching online.
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Another example is that we include a lot of the things that other agents charge you for separately within our Monthly Management Fee – and for an excellent reason too. If you search on the internet to find out what it costs to raise an invoice, you will be amazed to see that it is between £4 and £25 depending on how sophisticated the system is. See the article here.
We also try to keep our other paperwork to a minimum too. For example, if we get a bill for a maintenance item for say £50, we will not charge it to you straight away (remember the cost of raising an invoice?). No, we will wait until we have other items and then invoice them all together. Generally speaking, unless the amount you owe us is excessive, we will only invoice for these extra items once a quarter.
And finally, at Letabiity, we have honed our internal office systems to operate as efficiently as possible which means that we can get more done in the time available.
So by doing all the above and more, our ‘cost plus’ pricing policy means that we recover our costs, you get an excellent service, and the price you pay is a fair one. ….. read less
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The majority of our Management Agreements are signed over the internet. Under such circumstances, unless you are a Company, you are entitled to a ‘cooling off’ period of at least 14 days following the date of signing.
However, at Letability, we never want you to be stuck in a contract that you cannot get out of so here is a summary of the Termination information that we include in Clause 7.6 of our Management Agreement:
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1. If there is not a tenant in your property, you can terminate the Management Agreement with immediate effect. This doesn’t just apply during the cooling off period but at any time while we are managing your property. Just let us know and it will be done.
However, please note that if you have asked us to search for a tenant and we have commenced our work, we may charge you a fee to cover the cost of the work that we have done so far.
2. If there is a Letability tenant in your property under a Periodic Tenancy, you must give us two months notice of your intention to terminate the Management Agreement.
This notice period allows us to put everything in place to ensure a smooth handover of the property and to ensure that your tenant is comfortable with all the changes.
3. If there is a Letability tenant in your property under a Fixed Term Tenancy, you must give us two months notice of your intention to terminate the Management Agreement but such termination cannot be effective until the end of the fixed term at the earliest.
We make this stipulation because at Letability, we take our responsibilities to our tenants very seriously and we can only carry out that responsibility if we continue to manage your property throughout the fixed term.
4. Notwithstanding the above, if either party is in significant breach of any term of the Management Agreement, it can be terminated immediately.
5. If Letability wishes to terminate the Management Agreement, we must give you two months notice of our intention to do so.
Once again, you can see that our aim is to be fair. For any number of reasons, you might wish to leave us at some point in the future and if you do, we’ll make it as easy as possible for you to do so.
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The Advance Payment (it’s a little like a maintenance deposit) is required at the beginning of our relationship with you and is covered in Clause 4 of the Management Agreement. The idea behind it is that we are always in funds to make any payments on your behalf. This makes everything operate more smoothly as we never have to chase you for funds to pay your suppliers. And if we are not chasing you, we are not charging you.
The same applies with us raising an invoice. We have spoken about this elsewhere and you will recall that the cost of raising just one invoice is between £4 and £25 a time and somebody has to pay for that (yes, you guessed it, it’s you!).
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So, by taking an Advance Payment at the outset, we have less work to do so you save money. And when the time does come to invoice you, we will include as many individual items as possible on a single invoice so that that saves you money too!
The Advance Payment is used in the following circumstances:
1. Where maintenance is required on your property, we will arrange and pay for that maintenance.
2. During Void periods, if you have asked us, we will pay any council tax due and also pay for utilities. We will also pay for any ad-hoc maintenance items that need taking care of.
3. To manage our cash-flow where we have paid up front for an item but we only recover our cost over the duration of the tenancy agreement (items such as gas safety checks, PAT Testing etc.)
4. To manage our cash-flow where we undertake to pay the rentals – where applicable – of those landlords that have taken out Rent Guarantee Insurance.
5. Any other ad-hoc matters that we believe will be beneficial to our landlords.
The Advance Payment is a condition of our Agreement with you and is non-negotiable. Naturally, any balance of Advance Payment that we hold at the end of our relationship will be repaid to you.
And finally, the Advance Payment is taken at the beginning and represents one third of the monthly rental. However, despite rents increasing, we would never look to increase your Advance Payment – because that would mean more paperwork!
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Letability will inspect your property three months after the beginning of the tenancy and then at six-monthly thereafter.
However, if those visits raise any issues, we will make more regular inspections. (It is important to us that your tenant is looking after your property.) But don’t worry, where we decide that additional inspections are necessary, they will be carried out as part of the service under our Monthly Management Fee.
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On the other hand, if you need us to visit your property in respect of a maintenance matter (to let a contractor in for example), then there will be a separate charge for that.
Where the property is empty, we will make regular inspections at no cost to you provided we are currently instructed to find a tenant. If the property is not available to let (for example, during refurbishment or building works) but you ask us to make inspections, then we will charge for those visits.
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At Letability, we only use the Propertymark Tenancy Agreement provided by ARLA. The Agreement represents current best practice and is designed to be fair to both yourself and your tenant.
There is some room for specific clauses (for example, who is responsible for the garden) but other than that, the Agreement is as drafted. To protect both you and ourselves, we cannot make amendments to the Agreement other than noted above.
If the Tenancy Agreement relates to property in Wales, there are a few Special Terms and Conditions that apply as well.
Still have questions? Why not take a look at our other FAQs?