A property management firm is coming up to its first anniversary, saying that it has a multi-million pound rent roll achieved with minimum fees charged to landlords and tenants. It also insists it is not a letting agent, but an alternative.
The Happy Tenant Company, which operates across London and within the M25 but has ambitious growth plans, revealed its philosophy to LAT after Shelter hit out earlier this month at ‘rip-off’ letting agent fees.
The charity has won a campaign to have them unequivocally outlawed in Scotland and is currently campaigning in England, initially calling for tenants’ and landlords’ evidence.
The Happy Tenant Company provides landlords with a management service for a fixed fee, frozen for two years, and charges no renewal fees and no mark-ups. On a two-bed flat, with a £500 weekly rent, it charges £3,300 for the first year for a lettings and management service.
Tenants have no registration or administration fees to pay, and there are no mark-ups on any property management services such as cleaning, inventory and maintenance issues, which are all provided to tenants at trade prices.
The firm recently conducted a mystery shopping exercise to compare its own charges for a two-bed flat with a rent of £500 per week, with those of Foxtons, Chesterton Humberts, Winkworth, Marsh & Parsons, Hamptons, Richard James & Hunters, Kay and Co, and Savills.
Over a one-year period, the Happy Tenant Company claims to offer landlords savings of £2,004 on Foxtons and Hamptons (the most expensive). Over two years, it claims to offer savings of £5,796 over Hamptons (the most expensive), and £3,300 over Kay and Co (the cheapest). Over a three-year period, it claims to offer savings of £15,756 over Winkworth and Marsh & Parsons, jointly the two most expensive.
It found renewal fees in year three of up to £3,120 – charged by both Chesterton Humberts and Hamptons.
Jonathan Monjack, CEO of the Happy Tenant Company, said: “Our management team includes landlords and tenants.
“We realised some time ago that the exorbitant fees letting agents charge today is simply not acceptable, nor is the level of service tenants say they receive.
“Our business model includes using our size to secure our landlords and tenants the best possible deals on maintenance and third party services – often exclusive to us.”
He added: “We pride ourselves on not being a letting agent. Instead, using our collective property management experience of over a century, we are challenging the monopoly that has been enjoyed by these agents for the past three decades.
“We are putting residential property management at the core of our business, providing landlords with an alternative to letting agents or self management.
“We believe paying a letting agent more than 20% of the annual rental income year after year is unjustified, while paying administration fees on top of this, which according to Shelter can be as high as 600%, is scandalous, and despite this many landlords and tenants receive a substandard service. We formed the Happy Tenant Company as a direct challenge to change this.”
Despite not calling itself an agent, the firm belongs to the National Approved Letting Scheme, Tenancy Deposit Scheme and the Property Ombudsman.
Monjack said: “The excessive fees that agents charge today is now being highlighted due to the vast number of people having no other option but to rent.
“Both landlords and tenants have been paying too much for basic management and maintenance services, and it’s time that this was changed.
“We ensure that our landlords receive a ‘hassle-free landlording service’ at a cost substantially lower than they would otherwise be paying and that our tenants get the best service and quickest response times.”
The Happy Tenant Company’s Landlord Concierge Service sets out its stall as an alternative to using a letting agent or self-management, with the concierges on call 24/7.
Landlords can use the company’s tenant procurement service to market their property, conduct viewings and carry out reference checks to find the right tenants.
www.happytenant.co.uk
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Comments
whoops, sorry1
http://www.lettingagenttoday.co.uk/news_features/The-devil-is-in-the-detail
A previous article on the story which sums it all up, there is a subliminal sales message in there, the same article or near enough came out in January too.
I was advised by my agent that it was the law too so this might have its roots back as far as 2007 or a perhaps it is line of the sales pitch from mmmm's inventory clerks.
I paid for the moving in inventory (to protect me) tenant paid the moving out one (to protect them)
we're still waiting to see your proof to back up your claim that the tdp's and the courts will throw out a landlord/agents inventory.
No you are talking rubbish. And you're incorrect. I'm an estate agent.
Also incorrect re the cost. Through my agency, the costs of the inventory are split between landlord and tenant.
I'm telling you, do an inventory yourself/agentand you'll find yerself in bother
@ hmm
"My point is, to anyone thinking of doing their own inventory - dont. It counts for nothing in a dispute/in court"
You're talking absolute rubbish.
Show us evidence of one Court or TDP dispute where the inventory has been disallowed just on the basis that the landlord or agent has provided it.
Let me guess, you're an inventory provider, right? And who pays the inventory provider? the landlord. Which gives you a duty of care to that landlord, which in turn will add a bias to your work.
Dear @ ANOtherAgent
Get the dictionary out you plonker byased you dimwit should be spelt biased. If you are unable to spell and do lettings how will you get on with joined up writing and doing a proper description with the correct words used in an inventory? Look to the post immediately after yours and see the joined up writing and some descriptive big words which I doubt you can read let alone understand.
I would not want you as my agent that’s for sure. I do this work with pride.
On inventories you are prattling on about them and it is not what the article is about. Try words pictures and get everything signed by tenant and agent and get it dated.
Roy
My point is, to anyone thinking of doing their own inventory - dont. It counts for nothing in a dispute/in court
@ hmmm
"if there is a dispute later down the line any judge/dispute service, will see this is as bias and throw it straight out"
Really? I'll let the TDS, DPS and local County Court know immediately, they've obviously been getting it wrong for the last 4-5 years. {rolls eyes}
Re inventories
Use a completely independent and impartial proper inventory company always. If you are an agent or a landlord don't just do your own (no matter how good it is) - if there is a dispute later down the line any judge/dispute service, will see this is as bias and throw it straight out
Also make sure any inventory has been fully signed by both parties. An agent I know was in court the other day. He presented a copy of an inventory that bith parties had a copy of but because both parties hadn't signed it, he literally threw it in the bin
Anyone use the App - iSurvey for an Inventory?
In all honesty I'd give credibility to the inventory that most closely reflected the condition of the property and accurately lists the number, placement and condition of the fitments and furnishings regardless of who prepared it.
That seems to be what the adjudicators do.
@Ray Comer
Very flattering I'm not too sure that many other regular posters here would agree with your opinion on the value of mine.
I'll see if I have time to contact you but if I do it will not be for several weeks I am afraid, but meanwhile I stick to what I said about inventories and the TDP scheme's views of them.
More and more they are emphasising the need (obviously) to have an inventory and then closely follow that with comment about the need for quality. Then usually follows a comment about independence of provision being an advantage.
I have seen this several times recently especially from TDS and DPS and i stand by what I say. An independently prepared inventory is always going to be given more credibility in any dispute, ADR or Court, where the inventory is the key evidence.
No matter who else thinks what that is just common sense anyway. If you were a Judge which would you give more credibility to?
Looking at the Fixed tenant procurement fee offered by this company, they become very misleading. The charge is way in excess of most agents in my area, yet they take no account of that saving in their calculations in their on line calculator. Of course we can all claim to offer cheaper dels when ignoring other lower charges made by others!!
sorry to veer off topic slightly but IO's comment about the TDP scheme operators extolling the virtues of independent inventory providers is slightly misleading imho. I'm sure its not meant that way.
The TDS certainly don't have an axe to grind against landlord or agent inventories as long as they are accurate and laid out clearly; they say as much in their Guide to Inventories, check ins, check outs and Schedules of Condition leaflet.
Very few 'qualified' independent clerks that I've seen provide accurate and well laid out inventories, probably because they don't have any vested interest in getting it right, they are having to do it to a tight schedule because they have a set price so cutting corners is common, and they won't be the one that has to argue it with the tenant or landlord when it proves deficient.
So to imply that the TDP operators may prefer independent inventories isn't strictly fair, they don't.
We use a software package to produce our inventories and haven't lost a claim at TDS yet; they aren't biased towards the landlord (that would be an automatic fail) , they are fair, well written and clearly laid out, and supported by linked photographs in line with what the TDS and the other schemes outline as a model inventory.
Thank you Industry Observer, I really would like to discuss with you and have you challenge my ideas for rental reform whereby rather than beating every agent with a large cane, there is workable solution that suits Lenders, Landlords, Agents, Tenants and anyone who is a stakeholder in the Industry. The aim is to close the gap between Social and Private Housing provision with assisted tenants being accepted and respected alongside non assisted tenants. My ideas have already been discussed with and found support from some Stakeholders within the industry, so a level headed experience such as yours would be a real useful test.
I would be really grateful for your time and experience.
Best regards
Robert@addjuvare.com
@A.N.Other Agent
An inventory prepared by an independent inventory company has always been deemed to be just that - independent and professional. Has to be less biased than an in-house or Landlord self prepared one surely, even if the tenant does sign it.
Lately the 3 TDP schemes have all extolled the virtues of independent clerks in dispute cases, as have NFoPP and TPO etc.
I agree someone has to pay them - but they are paying for an unbiased and independent report which the clerk is prepared to swear to in Court.
@Robert May
You are absolutely right Sir and this is the key issue. Unfair Deposits, the most scurrilous piece of biased research ever from CAB in 1996 was, from ageing memory, based on 427 respondents to an in house survey where one of the choi9cest questions, for example, was "Have you ever felt deductions from your deposit by the Landlords were unreasonable ?"
And even more choicly "Have you ever had a deduction from a deoposit?"
From this CAB extrapolated that about 85% of tenants had money withheld and another 80% felt it was unfair - really?
And look where that landed us 10 years later - TDP.
@Steve from Leicester
Hello my old friend you are dead right - just look at the item on landlords under insuring dangers. No different at all to the same position for an owner occupier - just a trade advertorial.
By the way latest franchising article in Sept Property Drum has your CEO claiming M&Co were established in 1986 can you check this for me. Far as I am aware it was 1993 and Belvoir in 1996. M&Co may have been trading in 1986 but not as a franchisor the first national franchisor was Castle Estates who started franchising in 1989.
As you know we both like accuracy in claims!!
Have you seen the pricing page??
Another advertorial? I thought LAT was about news, not self-promotion!
BTW they are not that fantastic, our charges would be £2600 for the year.
Oh the irony. After writing in an earlier comment about start-ups who claim to have 40 years experience because Mum worked at an estate agent for 30 years and her daughter for 10 I re-read this and spotted that these guys have been tradign for less than a year but claim to have "over a century of experience". Classic.
Is it not £500 a WEEK?
Robbie - I agree that they say they "are not a letting agent but an alternative". However, read what they do, then apply the rule which says that if it looks like a duck, waddles like a duck and quacks like a duck its probably a duck.
PS: The opening line about a "multi-million pound rent roll" is great. If their typical rent is £26 grand a year they might have less than 100 properties under management - hardly a flying start if you're operating a "pile 'em high and sell 'em cheap model".
Its a bit like when start-ups claim to have "combined experience of forty years in the industry", which actually means "My Mum worked in an estate agency for thirty years, I worked in one for ten and now we've started our own business"
Actually Steve from Leicester, their USP seems to be that they are not a letting agent
Bearing in mind that this is primarily a trade forum, two questions come to mind whenever I see a story like this:
1) Why does LAT print what are nothing more than advertorials for companies?
2) Why would any letting / managing agent want to broadcast their USP to their competitors (rather than their customers) in the first place? This is especially so when your USP is (or is claimed to be) "Come to us, we're cheap"
It is a pity no-one paid proper attention to Shelter’s claims that 1:4 Britons are being ripped off by agents. 66% of the population do not rent and only 49% of those that do rent do so from Private provision. There are only 3.6 million Properties being rented privately, a figure which includes properties let directly by Landlords without the use of agents.
To have Agency fees "outlawed" on the back of such incorrectly extrapolated data should be very concerning. It is disappointing neither Government nor NFoPP picked up this manipulation of data before passing legislation that affects the very large majority; good and professional agents along with the very few bad apples. Let us hope that those that represent our profession are on their guard for such legislation south of the border and scrutinise such tabloid claims of wrong doing.
In regards to this story, had it occurred to HTC that the firms approached might be using their fees to assist filtering the type, style and location of the properties on their books; Agents used to letting property to Borchester Rovers players might not wish to be instructed on a 2 bed flat in Harlech Towers?
The fees of HTC need to be compared with agents whose normal market is £1500- £2500 pcm flats not just a selected handful that do not represent the full spectrum of agents in the area.
If charging tenants a fee upfront becomes illegal, how do you split costs of the inventory in order to keep it impartial? As an inventory paid for by the landlord is deemed byast.
Also, as has been mentioned, prohibit tenant fees and landlord costs will go up, meaning higher rents. So what next? Area wide rental value caps to stop 'rip off lanldords making money'? Now that would really **** up the economy
SHELTER, THE NATIONAL CAMPAIGN FOR HOMELESS PEOPLE LIMITED
Why not compare Shelter's accounts with other similar organisations?
They have increased their Shareholder Funds from £11m to £22m in four years and are sitting on £3m in cash!
sorry ....."they're not ...." it should have read!
I'm not sure what, exactly, is the story here? 12.6% is probably the "average" fee a management agent charges. I guess "Letting Agency which says their not a letting agency, charges average fees", wouldn't have been a good headline.
Lots of agents provide the same service with no mark ups for less so what is so great about the Happy Tenant Company?
I would agree with hmm.. that it is very easy to compare any one of a number of companies (in any sector!) and find out that they are cheaper than the big companies as the big companies have always been able to trade on their percieved brand and some people are convinced by the hype.
Seems to be more of an Advertorial than a properly considered piece of journalism.
Shelter needs to think carefully about their campaign as chances are rents will rise (costing more for the tenant in the long term) if admin fees are removed as some agents will charge the landlord more and that will be recouped by higher rents!
Rant over :-)
@Agent
Quite right too early in the morning, comment withdrawn.
Should have realised on a 2 bed flat at £500a month in London the agent could have charged the tenants whatever fees they liked as there would have been a queue a mile long!!
"Industry Observer" - Bit of a worry that you observe the industry but don't read the story correctly? £500pw!
Yeah let's make ourselves look good by comparing ourselves against some of the biggest companies in the industry!!
As IHS states, they charge less for the same. So does my company and also thousands of others will too
At 12% on £500 a month that is £720 a year normal management fee.
And this company charges £3300 presumably all up front?
And that is something to crow about is it?
Unbelievable - and agents wonder why pigeons are coming home to roost on tenant fees.
our fees for that rent over the same period would be £3120, still less!
Our fees for managing a property for one year with a rent of £500 per week would be £2670. Too much generalisation here methinks!