Shop lease - property agent

[unclegrouch]

Hi PH

Further to my questions about opening a second shop, & all the good advice received, maybe I could run this past one or two of you to see if I am looking at it the right way.

A week or so ago I took a ride around some local towns & found a couple of shops that are perfect for our business (both good location, both fitted out very nicely).

One of the shops (25 miles away) is mine for the asking, rent agreed, deal directly with landlord, all very "old school", done on a handshake (we discussed rent & he emailed me an offer which we have to decide on within 2 weeks).

The other shop is nearer, in a slightly better location and slightly dearer, but to be honest it is worth the few £ extra. Board in the window was from a property management company & after a quick call whilst there, an immediate "quick look around" was arranged before his pre-booked appointment. so far, so good.

The chap then rings me to tell me it's quarterly in advance & although I appreciate this is common practice, he offers to speak to the landlord to ask if 1 month as a permanent deposit + one month in advance would be acceptable - This was accepted by the landlord & application forms emailed to me today.

Forms completed & faxed back, I get a confirmation email stating the following ....

I can confirm that your fax has been successfully received and that you have secured the lease to xxxxxx xxxxxxx xxxxxxx, subject to the payment of your deposit (£xxx plus VAT) and application fee (£250 inc) and the return of your references).

£250 "application fee" WHAT is that ? i can only assume it's a fee for the property management co to stick in their coffers for obtaining my references & shuffling some paper. At no point has this been mentioned before & surely the landlord pays the PM co fees ?

I feel more than a bit peeved at this & to be honest feel like taking the offer on the other shop.

My question is; Is this normal practice (always dealt direct before, never through an agent), or are they taking the juice a bit ?

FWIW - the £250 doesn't matter that much in monetary terms, but it does to me in principle UNLESS this is standard form on commercial property, & something we have been lucky to escape until now.

Opinions welcomed as usual

[singlecoil]

Not come across it myself, and I've had a couple of leases in the past. I suggest that you proceed with the better shop (if you fancy it) but explain that you won't be paying any of their 'fees'.

[JQ]

The landlord normally pays the agency fees - their fee should be circa 10% of the annual rent. Sounds like this is a Residential Agent doing some commercial agency on the side - it's more common place for the tenant to pay fees in resi. Although the £250 could be to cover credit checks.

How much is your annual rent? £250 does not sound very much to me for a better location and I don't think you should let it put you off.

[davidjpowell]

Very unusual and as others have said almost certainly resi agents playing at commercial.

Ultimately it is only £250 and you must judge whether it is worth arguing or paying over this amount

[unclegrouch]

Many thanks to all for the replies.

I do agree that £250 isn't a lot of money in the grand scheme, but it's niggled me more on principle & not being told at the start does come as a bit of a stab in the back & somewhat underhanded.

I am fairly sure the management co is quite small, and mainly residential, which seems to add up.

I will certainly be expressing my displeasure & am still not sure which way it will go. Part of me says it's silly to cut my nose off etc. but being a fairly grounded sort of bloke, I just hate being taken for a ride so it's anyone's guess right now