Re-let fee for same tenants staying on another year?

Just wondering if this is correct?

Lease renewed for another year, same tenants, is it standard to be charged a re-letting fee?

Thanks you for your advice :)
 
Not a full re-let fee. Some companies may charge a small fee for writing up the lease of maybe $100 or something (although I don't pay it), but certainly not the standard 1 or 2 weeks let fee, that is excessive!

Check your contract, it should state the fees in that.
 
No, that's not standard at all. I have only once been charged that, and that was in a regional area where things aren't as smooth or reliable as my city PM's.
 
I agree, I'd be trying to get rid of that fee. Whilst I have seen that fee thrown around, usually $55 or $99, many agencies don't charge it (none of mine do) and I reckon you'd be able to negotiate it out pretty quick.
 
Could someone explain why a re-let fee shouldn't be charged:confused:

Before you answer here is my arguement for charging one. The current tenant you have, lease is expiring which in most cases turns into a month X month tenancy should no party object, so now the agent (on top of managing, chasing rent etc etc) needs to sit down with the tenant and nut out a new lease.

Further more you want to increase in the rent a full year term (or in the case of commercial longer) however once again don't wish to pay the agent a fee to secure the tenant for another term even though the fee is tax deductable in most cases. Is it just me or is this madness.

I understand that some agents charge an arm and a leg and they shouldn't but is it unfair to charge a "reasonable" fee?

our charge is capped at $220 and for the work involved sometimes this is not enough
 
Could someone explain why a re-let fee shouldn't be charged:confused:

Before you answer here is my arguement for charging one. The current tenant you have, lease is expiring which in most cases turns into a month X month tenancy should no party object, so now the agent (on top of managing, chasing rent etc etc) needs to sit down with the tenant and nut out a new lease.

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I would think in most residential instances, the agent calls the tenant, asks if they want to renew the lease for a further twelve months, tenant comes to the agency, signs the new lease, which I imagine is saved somewhere on a computer. If not, then it would take five minutes to fill in the spaces of a new one.

Maybe the price per week has changed, but most things would be exactly the same. I would not want to pay one week's rent for that.... and I don't.

Commercial leases may be different, and I am not saying I would not pay "something" for the small amount of time spent signing up residential tenants for another year, but I don't think too much time is spent on re-signing residential tenants to a new lease.

I wonder if the agent does anything more, like inspections prior to signing new lease, or if the regular inspections just continue. If there was extra work involved, there is some justification for a small charge, but one week plus GST is extreme in my opinion.
 
Sometimes I wonder what the ongoing commision is actually paying for when I read some of the comments on here. Some have even found their own tenants and still been charged a letting fee. I have read about people paying fees for just about everything, fees for inspections, advertising, renewing leases, monthly statements etc. It would appear that in some cases the commission charged is purely for collecting the rent which is probably paid electronically anyway.
 
Could someone explain why a re-let fee shouldn't be charged:confused:
Oh, don't worry, I'll tell you.

Before you answer here is my arguement for charging one. The current tenant you have, lease is expiring which in most cases turns into a month X month tenancy should no party object, so now the agent (on top of managing, chasing rent etc etc) needs to sit down with the tenant and nut out a new lease.
As Wylie said, it does not take all that long. That is part of managing, my friend.

Further more you want to increase in the rent a full year term (or in the case of commercial longer) however once again don't wish to pay the agent a fee to secure the tenant for another term even though the fee is tax deductable in most cases. Is it just me or is this madness.
Give me a break. Just because something is taxdeductible does not mean it is fair and reasonable to charge it.

I understand that some agents charge an arm and a leg and they shouldn't but is it unfair to charge a "reasonable" fee?

our charge is capped at $220 and for the work involved sometimes this is not enough

So......you think it a "reasonable fee" to charge $220 for a re-let fee because the Landlord might like to increase their rent, maybe $10pw, or $520 for the year. You have just helped yourself to nearly half of the increase for the sake of writing a letter and implementing it. Can you please tell me where that is fair or reasonable?

In NSW there is a lease preparation fee which costs $33. This is the cost of the paperwork. I have been charged this by all my NSW Agents. The tenant has to pay half of this cost, minus the GST, so $15 for the tenant and $18 for the Landlord. This is the only re-let fee that I will pay. Anything other than this is just a rort.
 
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Could someone explain why a re-let fee shouldn't be charged:confused:

Do you also charge for inspections, writing up condition reports and all the other little bits and pieces a PM does? Where does it end? I personally think the management fee should cover it all.

Some tenants/landlords will be time consuming whilst others are very little. For example I had a good tenant in the last 18 months, they paid their rent, asked for very little and as far as I'm aware had little contact with the PM except to pay the rent. Now all that cost me about $1,400 in that time. Did I get $1,400 worth of value? I don't think so (in fact going by the last few months, definately not, but that's another issue), but it was peace of mind for me. In that time they did one one lease renewal which was straight forward and I would not have been happy to pay anything extra for.

Don't get me wrong, I'm not one of these landlords who expects everything and wants to pay nothing. I see what goes on behind the scenes, and how busy PM's can be, how demanding and unreasonable some tenants and landlords can be, and how much time some take up. However, my point is, I think there are many properties that just tick along without much fuss which are collecting reasonable management fees, whilst some others will take more time, so I think it balances out.

Otherwise, you could justify charging additional fees for everything that takes more than 2 minutes of a PM's time.
 
As an agent that has been around a long time I also agree with Biggles, Skater and Wylie. We don't charge a re let fee, I personally think it is a bit of a rip off. We do charge a let fee when placing new tenants as we drive out to the property, show tenants through, do the condition report and so on and therefore believe a let fee here is justified. Once the tenant is in place renewing a tenancy is a little work, but as Wylie said part of doing our job and should be included in the management fee. :)
 
We do charge a let fee when placing new tenants as we drive out to the property, show tenants through, do the condition report and so on and therefore believe a let fee here is justified.

Sorry, I do agree with that. When I said the management fee should cover it all, I didn't mean the initially letting of the property. I appreciate there is a lot of work involved in letting the property out to new tenants and advertising etc. Especially if the property is vacant, the PM isn't even generating a management fee at that point.
 
2 weeks for a new tenant, 1 week to re-sign an existing one out here.

Plus a fee for statements, another fee for inspections, a surcharge for some districts, and a minimum too ... worked out to 20% for my old house.

I self-managed it.
 
Just so happens I'm reading my agreement before I sign up an agent. I have a few X's marked for questions.

The relet fee is $49 I noticed (and marked) another section had for each let $330.00 so MUST get this checked first along with a lot of other stuff. I'm not about to assume relet is only $49.00 don't want $49 + $330 for a relet.

I also noticed a 90 day notice clause which fees are paid to agent if either decide to go differnt ways. Going to get this back to 30 days.

I was going get the relet fee for existing tenant Xed out.

Brian
 
Sorry, I do agree with that. When I said the management fee should cover it all, I didn't mean the initially letting of the property. I appreciate there is a lot of work involved in letting the property out to new tenants and advertising etc. Especially if the property is vacant, the PM isn't even generating a management fee at that point.

No, there isn't a lot of work in letting a property.
The paperwork takes 1-2 hrs at the very most.

PMs are being paid very well, for the amount of work they do.
 
Interesting discussion but a few points to consider:

If the management fees are so high or excessive, why dont you manage yourself - Because you want the agent to deal with the problems that come with IP and let me tell you, it is a lot. But you always have that option.

The other point not considered about Re-newal of leases fees - If the agent does NOT negotiate well for you, what will happen? VACANCY! So paying a PM a small fee for renewing a lease is a small price to pay to secure your future rental income and not pay a FULL Let fee which is a full weeks rent. Also the PM will save you on Vacant Days on Market, which could cost you thousands if your market place is well supplied.

So when we think about it, $55 is not too much to pay for security of income in our IP. I have no issue paying the fee because I want them to negotiate for me and secure my future returns. Am I happy, Yes a lot happier if I dont have to pay a full let fee and have vacancy.;)
 
Thank you Simon that is exactly what I was going to imply all be it a tad (ok alot) harsher.

Further more that $220 is for commercial leases and let me tell you the disclosure statement and lease preparation take a lot longer then 1 - 2 hours.

By the way when you look to move into CIP's let me know when the agent that spends no longer then 1 - 2 hours on the lease and more importantly the disclosure statement calls to advise you that they have had a notice from the small business commissioner regarding the figures in said statement.

Could cost you alot more then $220. One landlord I spoke to was charged a fine of $10,000 because the agent omitted (failed to fully complete) a disclosure statement and lease.

Also if the tenants in RIP's are anything like those in commercial they won't remember when their lease is up for renewal (unless they are moving out or very organised).

please understand that I am looking maximise your ROI and this in turn increases my revenue it's a win win.

one last comment biggles you say that your agent charged $1,400.00 in fees for the last 18 months or $77.77/month not that bad for piece of mind for something that you invested 100's of thousand's of $$$$ on;)

forgot to add that no an agent should not charge an inspection fee that is their job to Act on your behalf and inspect the damn thing.
 
When I bought one property the existing managing agent gave me a quote. THey wanted to charge for everything. I worked out what they potentially could get and I was staggered. I got another PM to hnadle it nad tehy were much more reasonable
 
Also I shall add a couple of things I don't just sit in an office all day if the roof leaks, hot water system blows etc etc I don't just sit there I go out with the trades person and hop on the roof or look at the HWS with him/her so as to insure that the problem is:

1.) fixed
2.) we are not being over charged

let me know of another agent that will hop on the roof of a 18ft factory for you.
 
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