ludlow thompson rip off?? advice please!

[DaveR]

I haven't been in the lettings market for years - when did it become normal practice for an agent acting for a landlord to charge fees to the tenant? There seems to be an inherent conflict of interest. I wonder whether the practice would survive a proper legal challenge.

[d.victor]

The fees are paid by the landlord which are usually between 3-8%

The tenant pays an admin fee which involves the referencing and tenancy aggreement

[andrewmc]

I don't think anyone needs you to explain the role of the agent.

This discussion was about underhanded practices where the agent drafts a contract containing clauses allowing them to switch the tenants utilities to companies from whom they receive commission.

In this instance they are not acting in either the tenants or the landlords interest, and in the case of Ludlow Thompson they took money in the form of fee's from the tenant, a finding tenant and managing fee from the landlord and a kickback / commission from spark energy for drafting a contract and switching the utilities.

I pay significant sums of money each year for people to let and manage properties - I know full well what they do and how well good ones perform as well as what might be considered poor service.

the issue here was not whether it was a good service or a poor service or whether it was value for money, it was the exploitative nature of the contract and that the process was handled in an underhanded manner. A point you singularly seemed to have failed to pick up on.

So we don't need lessons in what they do, or how much to pay.

As to landlords playing them off against one another, thats a market place, if the agent wants the business, the response is not to get aggressive but to find out what they might do to win the business over.

If you run a business and are rude, inconsiderate, do not act in your clients interest, are exploitative, don't be surprised when you get poor reviews and comments on forums such as these.

[DaveR]

"The fees are paid by the landlord which are usually between 3-8%

The tenant pays an admin fee which involves the referencing and tenancy aggreement"

That much I understand. However, when you take money from someone under legally binding arrangements, you have certain duties (including some that might not appear in the written contract). If two parties have different interests, and one person has duties to both, that can present a conflict. Calling the fee you charge to tenants an 'admin fee' doesn't get you out of a conflict - it just tries to hide it.

[JohnL]

I wouldn't have replied - if people shout on the phone ... hang up, block.

buddug Wrote:

-------------------------------------------------------

> On a different note, bearing in mind Tom just said

> Ludlow Thompson offers a friendly service, a

> couple of years ago I contacted their sales team

> to get my flat valued as I was thinking of selling

> up and moving back to Wales. Someone quite

> pleasant came out and I got a valuation. But a day

> later an aggressive and extremely arrogant man

> from their office rang me, saying I really had to

> make my mind up. When I said I was still thinking

> about it, and I'd have to go up to Wales first to

> have a look at some properties, he started

> shouting at me, saying something along the lines

> of: 'Now listen, you've already wasted enough of

> our time and if you want us to work for you you've

> got to keep to your side of the bargain.'

>

> I then calmly asked him if he was for real,

> reminded him his wasn't the only estate agents in

> East Dulwich and said he'd just lost a possible

> customer and put the phone down on him. He

> continued leaving bullying shouty messages for at

> least another week. I ignored them. Unbelievable.

[data90x]

Hi all, as an agent who used to work for Ludlow Thompson and reading the comments on this forum I feel obliged to offer a response. Please understand I am trying to keep this review as neutral as I possibly can, but I hope my story helps to answer some questions, and offer clarity into the industry and the company.

I started with LT about a year and a half ago, and it was my first experience and job in the lettings industry. Previous to this, I was at university, and after studying religiously for 3 years in my chosen field, I found it very hard to find a job, or secure an interview. As with most of the younger generation in my position, the majority of jobs I found on the likes of total jobs, and reed etc. were for trainee lettings/estate agents, or trainee recruitment consultants.

In the end, I bit the bullet and ventured into the world of lettings. I had a telephone interview with a lady from LT?s head office, after which I was booked in for an interview with one of the company directors. I immediately gaged that he was looking for someone ?cut throat? as soon as I started speaking with him (which does not come natural to me ? ISTP for any of you who know what I?m talking about ? if not google it!), so I stepped into character and put on a show of an interview. After this, I was booked in for an interview with one of their branch managers. I don?t want to say which, as it would be very easy for anyone working for LT to know who I am if I did.

Ok, back on track, from here onwards the story goes downhill I?m afraid. Firstly I will try to answer some direct questions as best I can, and the reasoning behind. From a tenant?s point of view, the most frustrating thing about dealing with an agency is the fee. For LT, this is not a fixed fee, but proportional to the rent of the property. On a typical 2 bedroom apartment in London with a rental price of about 380pw, you will be looking at 1.5 times the weekly rent + vat as your agency fee, so a fee of 570, and vat of 114. This amounts to ?684 being paid to the agency, before you even start with the first month?s rent upfront and 6 weeks rent security deposit, giving you a total move in amount due on a typical 2 bed of ?3100. Things to know about this fee ? it is negotiable no matter what they tell you, but only down to a minimum of 350+vat (420) as if the fee goes below this amount, the negotiator responsible for the offer will not be paid any commission by LT. This being said, only the manager can authorise a reduced fee (the computer systems will not let a negotiator proceed with the deal without it), and it is at his/her discretion. If the apartment is in demand, you won?t stand a chance at lowering it so either have to accept it and proceed, or pull out of the offer. The fee is all inclusive, and there should not be any separate charges tenant side for referencing etc. (which are done in house by the midlands team).

The main point I would like to stress with you all, and any of you who find yourself renting through LT is their obsession with long term contracts. At a valuation, all landlords are sold the benefit of long term tenancies i.e. 36 months, and if a landlord decides to proceed with the management package, you will be practically forced to accept a 3 year tenancy or nothing at all. Unfortunately, there is nothing you can do about this, and no advice I can give you other than to RUN. If a landlord has agreed to a long term tenant, you will not even have your offer put forward if you do not accept 36 months (the reason for this will become clear latter on). You will be told about how the contracts on managed properties are very flexible, and the duration is for 36 months but you can replace yourself at any point. You will be told that there is a one off fixed fee of ?200 to replace the name of the tenants on the contract, and they will effectively take over your tenancy for the duration. You will be told how it?s a great thing and means the landlord cannot put the rent up, and might be more flexible with any requests you have. What you will not be told, is that you have to find the incoming tenants yourself if you do need to leave (which in the city you will probably will), resulting in private Gumtree adds being placed by you, the stress and headaches of conducting the viewings, and at the end of this, the tenants must undergo the referencing and pass to be able to replace you on the contract. The reality of the situation is that you will spend a month or two trying to let the property yourself, only to eventually come to your move date and still have not found a replacement tenant (only agencies have access to sites such as right move and zoopla). At this stage, prepare to say goodbye to your security deposit as LT will happily remarket for you, but will insist tenants sign a new contract ? as otherwise the negotiators will not be paid any commission, so will not even conduct a viewing. If you agree to this, your security deposit is forfeit as they will insist you are still in contract and costing the landlord money.

This leads me on to landlords, and LT?s business model. Around 90% of LT?s income is from new business, and new landlords dealing with the company. Very few properties on the market with them are from relets. Don?t get me wrong, it does happen, and there are landlords on the books who have been with LT for several years. I am not trying to badmouth the company here, but only to give my honest opinion and an insight into how they work. To stray off topic again, most of the tenants I dealt with in my time at LT where happy with the service they were provided, and the same with landlords. Everyone is encouraged to leave a review on allagents.co.uk after dealing with LT, and they have thousands of 5* reviews which I can confirm are not fakes. Initial rates a negotiator will pitch for the service at a valuation with a landlord are 10% for a tenant find, 12.5% for a rent collection, and 17% for full management. These rates are obscenely high, and I encourage any potential landlords to always shop around. My family are landlords, and receive full management for 10% from smaller independent agencies. If you go any lower, you begin to sacrifice quality and service for saving a few pounds over the years, and it is a risk not worth taking in my experience. Again, at LT if a negotiator goes below 8% for the let only service, 11% for rent collection or 13% for management, they will not be paid for the instruction so this is as low as you can negotiate with them. Depending on the negotiator performing the valuation, you will either be told about the add-ons, or receive them as a nasty surprise further down the line (usually after a tenant has been found and your property is empty thus in a void period). This however depends on the negotiator in question, and does not just occur in LT but all agencies everywhere. Some negotiators seem to have a ?don?t ask, don?t tell? policy.

Going back to LTs obsession with 36 month tenancies on properties, the reasons for this is as followed. Unlike smaller agencies, LT will take their agency fee over the duration of the first couple of months ? even with their management package. Now this is the norm on basic tenant find services as after finding the tenants an agency usually has no more dealings with the landlord for the duration of the contract. Most agencies would give you the option with management to pay the % charge each month. Now imagine you have a 3 bedroom property in the City, you have been pitched management at the valuation and agree to a 13.5% charge (the average management fee). Your tenants have been suckered into a 36 month contract at ?480pw so you are happy that you have secured a 3 year tenancy and have no need to worry about your property. The next shock is after your tenants move in and you receive a breakdown showing a total agency fee of ?10,108.80 to be paid over the first few months. They charge 3 years management upfront. This means that if down the line the tenants do move out early and you have to remarket the property, you are owed a huge amount of money by LT which they will not refund to you, but offer a rebate/deduction from your next fee meaning you have no choice but to stick with them or else loose the money. You will then be forced into accepting a 3 year tenant again, end up paying LT more money and so the cycle begins again! My advice if dealing with LT as a landlord is to steer clear of their management, or if you need it do not fall for the long term tenant pitch.

Now, life as a negotiator working for LT is very cut throat. Most of your colleagues will go behind your back at any time ? although again this is true of most inner City agencies, especially those with high staff turnovers. You may have heard the phase for people paid on commission ?you are only as good as your last pay cheque?, well this is defiantly true of LT. You could go from top negotiator one month, to an average performance the next and be heavily penalised for it. The job was very stressful, and in some ways very much like a call centre. LT had a fantastic landlord database, with the details of over 20,000 landlords throughout London. This resulted in hours spent each day being used to bombard landlords with calls and emails (sometimes 3+ people would call the same landlord in a day as people rarely updated the notes) trying to find availability dates and when their property would be coming vacant. My advice if you are a landlord and ever find yourself on the receiving end of these calls is always to say 10 months from now ? thus giving yourself a little rest bite as they will just forward date your details. Asking to be removed is pointless, again your details will just be forward dated by 6 months and the spamming will begin again.

I will wrap this up now with a few final comments as I appreciate this is a long rant. A negotiator should expect to earn around 25-50k per year in inner London, with a manager upwards of 60k. LT had a very complicated commission structure in place, however this was irrelevant as I don?t think I ever received a pay cheque from them that was correct (by my calculations they still owe me over ?1000). I hope I have answered some questions, and given you an insight.

As a final point, in defence of Tom Burke. From what I could tell with my few interactions with him, he did not come across as a ?typical estate agent?, and from my experience with LT, he is probably the only manager they had whom you would likely find on a forum such as this addressing customer concerns. He took over the City/Docklands branch around the Summer of 2013 so this may have been why he was not replying to these posts, however from what I hear he is no longer with the company. I imagine he also got fed up of the directors and has moved on. Tom was easy to get along with and very laid back. After attending his training lessons and company inductions which he ran, I imagine a valuation performed by Tom would be more like a chat with a friend at your local as opposed to a sales pitch! Very nice guy, and with that I end on a positive.

Please don?t judge me as I do not consider myself to fit the general conception people have of an estate agent. You will not find me pushy or ?salesy? if we ever cross paths. I served my time with LT for CV experience, and have since moved onto a company in outer London who value their customers and landlords, and are not all about maximising their immediate profits at the expense of customer service and repeat business. Fits me a lot better, and my way of life. Rant over. Any questions, I will pop on and read so will try to answer when I can.

[Greengramaphone]

Thanks for the Ludlow Thompson insight data90x! Interesting to hear how it works from an insider's view and having just let a flat from Dulwich Ludlow Thompson, I experienced much of what you described but took much longer to obtain this information directly from them! As others have mentioned, the admin fees were a main issue and LT seemed to be pulling numbers out of the air. First they were ?360, then ?405, then ?420, then ?457!? No one explained that they are calculated as a % of the rental price agreed until the last possible moment under much questioning. When I did question it, finally (with management permission) we were given the ?420 fee, which we were assured was the lowest they would go to. (Reassuring in a way to hear that confirmed in your post above!). That?s crazy about LT taking all their landlord fees at the beginning of the contract, our landlord just mentioned having to wait to do some work on the flat as LT have taken all their fees out already.

I had heard negative reviews of Ludlow Thompson and we were avoiding them when looking for a flat. Unfortunately a flat we really loved the sound of ended up being let with them and we went to see it just in case, all the while thinking we wouldn't take it because we didn't want to let from LT. Unfortunately it was the best fit flat for us we saw and we ended up deciding to just be vigilant in everything we signed, make sure we understood/questioned all steps and to take the LT risk/hand over double admin fees, in return for the reward of the flat we wanted.

My biggest issue with LT is the amount charged for admin fees. They are the highest I have ever encountered although I think this is becoming a general agency issue. However, I let with Winkworth Herne Hill before which charged ?117.50 admin fees + ?25 per applicant referencing fee. The ?500 to make an offer and ?500 to hold a property is also really unreasonable and much more than other agents I've experienced ask for (Winkworth Herne Hill asked ?200 for this). It's annoying and inconvenient but as Tom clarified, this ?1000 is taken off the full amount due for deposit/fees/1st month rent so if you definitely want the property then it's just having to come up the money sooner. I don?t think there's any way for them to justify charging ?400 plus for ?admin? fees though. We asked for a breakdown of the admin fees but were told they are to cover referencing (which costs much less than this) and legal fees. The funniest thing is that in their subsequent emails they asked us to print the contract out at home and bring it in to the office! So for ?400 plus, they were suggesting they weren't even going to cover the cost of printing the contract! Ha! Well, in the end they did. . .so that was a relief!?

I researched agency fees and there?s a lot written lately about how agency admin fees are getting out of control and going up and up with no justification/explanation. Interestingly enough I read that they should be going down since in this new age of internet with gumtree/forums, the landlord/tenants can find/communicate between each other directly much more easily, do reference checks themselves online and actually agents now need landlords/tenants more than we need them!

When making the offer on the property, I asked Ludlow if they'd be managing the property or not and we were told we'd work that out later (?!). I am SO relieved after reading everything here that they are thankfully not managing it but just doing rent collection (despite an erroneous message we received from Ludlow saying the contrary).

We have however just experienced the strange "Spark Energy" phenomenon. Our property was already with Eon, we received an estimated bill from them after moving in and then called to set up an initial DD tariff. I received info from Spark in the mail (which I thought was just advertising) and included them in my call around to compare different other energy rates available. When I called Spark by chance, just to get their rates, I learned we were actually in the process of being switched over to them (??!), as approved by Ludlow. My first reaction like other posters on here was to be annoyed and angry. They said there was probably a clause in my rental contract about it. I checked and it said that "The Tenants acknowledge that at the start of the let the Gas and Electricity for the Property will be provided or will be in the process of being provided by Spark Energy. However this will not prevent the Tenants from changing to a different energy provider if desired." When I read this out, Spark confirmed that we were free to cancel the change up. The ?check list? from Ludlow worded it slightly differently though saying ?Tenants notified of their responsibility to arrange for ALL utilities to be put into their names - Spark Engery can assist them with this for Electricty and Gas. Hometelecom can assist with telecom and broadband.? This definitely makes it sound more casual and not that they?ve already switched you! We also received calls from Hometelcom with offers but they (apparently) didn?t have permission from Ludlow to take over our service.

When I got Spark's unit rates for their Direct Debit Advanced 4 Tariff (you have to ask to switch to this tariff, it?s not the one you?ll automatically be on from switching over), and compared them with other energy companies based on our actual usage for a month (not an estimate), it turned out surprisingly that Spark?s unit rates are actually cheaper than all the other companies I contacted (Eon, Scottish Power, Npower, British Gas, EDF). The rate is not fixed so in theory could go up in the next year but they have to give you notice of this and as there is no exit fee and it is cheaper at the moment, we decided to stick with it and try it. Having now read reviews online for Spark though, I'm feeling a bit nervous as it seems that they try to send you a huge estimate bill, make you pay, make it difficult to leave and have terrible customer service :/ ! I have to say though, they?ve been fine in the interactions I've had with them. The office I called seemed very small, the 1st person I called gave me his name and said to call back and ask to speak to him! Guessing that may be because I'm a new potential customer though.

I did feel the cut throat atmosphere referenced above in Ludlow. When reading over my contract there were sales agents who seemed to be laughing together about the client that one agent had been speaking to on the phone after the agent hung up. I thought it was pretty unprofessional, especially as I was sitting there! When going over details of my contract/new flat, I asked a question that the agent laughed/sneered at incredulously b/c apparently he had just answered it beforehand. There?s a lot of info to take in when letting a new place and I didn?t really feel that was called for! Having said that, I?ve heard nightmare agent stories of agents showing up to viewings without keys/not showing up, etc, and the negotiators we dealt with were accommodating in arranging a last minute, time-specific viewing for my partner and were courteous and punctual. There were mistakes on the offer form and rental contract but we just made sure to read/double check everything we signed.

We went in prepared that letting through LT may be difficult and sad to say this thread has confirmed we're likely in for more issues but fingers crossed that's not the case. . .

[data90x]

Hi Green, interesting to here from a tenants point of view as well.

In terms of spark energy, I think it's a major problem for agencies everywhere. They obviously have a commission structure set up with the agencies in regards to referrals (I am not privy to the information as it would be property management whom deal with this), although this being said, a lot does happen behind the scenes in regards to a tenant move in. Below is an interesting article trying to justify tenant admin fees as I'm not sure if you are aware, there was a recent vote in the house of commons as to whether these should be banned (as there are no fees for purchasers of a property - unless sale by tender but that is a different matter).

http://www.concentriclettings.co.uk/about-us/news/should-agents-charge-tenants-fees/?dm_i=Z6K,2G868,5FPAQU,8WUI3,1

I think the benefit of spark energy for most agencies, is not only the commission for someone (not sure who, but someone), it makes the switching of contracts into tenant names a lot easier on managed properties as they only have to call Spark, hand over the details and then they will deal with the cancellation of the old contracts, meter readings etc.

In regards to admin fees, nowadays you should expect to pay around 2 weeks rent when all add-ons etc. are considered. A main problem for agencies is the amount of competition. On an average property, just dropping the landlord charge by a single % is a loss of a few hundred pounds for the agency in fees, which they need to recoup at some point down the line. There are a lot of overheads to consider, some of the main ones being the costs of using Right Move and Zoopla to advertise nowadays - which for LT is in excess of 20k per month alone.

I hope your rental goes well however, as they are not managing it will be the landlord who deals with any problems you have down the line (hopefully none), and you have not been suckered into a 36 month contract so congratulations on escaping that one!

Watch your back with Spark, but as you have already anticipated, as long as you don't pay one of their estimated bills you should be ok. They are competitive when on the right tariffs.

[April2014]

Why are you asking this question AFTER you already handed over the ?500? Did it not occur to you to have a good think before letting go of 500 quid? Or are you super rich? ;-)

[data90x]

April2014 Wrote:

-------------------------------------------------------

> Why are you asking this question AFTER you already

> handed over the ?500? Did it not occur to you to

> have a good think before letting go of 500 quid?

> Or are you super rich? ;-)

A ?500 holding deposit is not unique to LT, and you will not find many agencies in London that do not require one if you are putting an offer down.

The reasoning for this, is because negotiatiors receive an offer, speak with a landlord which can sometimes take a few days, get an offer accepted, go back to the tenants and they are not interested anymore. This has a negative effect on the agents and the landlords relationship, and on some occassions could loose them the instruction (costing them ?1000s of pounds).

Holding fees are not a bad thing, as they come off your move in monies after all and prove your offer is serious.

The problem with LT, is that they take a ?500 holding, and then a second ?500 ususaly within 24 hours of getting the offer accepted. The main reason for this, is because until there is ?1000 down on a property, all the negotiatiors consider it fair game, so even though you have put ?500 down and you think the property is reserved, it is not. If someone else beats you to ?1000, you will loose out.

[Greengramaphone]

Really? That's crazy! I asked & asked for clarification & as far as I understood, putting down the 1st ?500 meant that we would have the opportunity to raise our offer if rejected FIRST before any other offers could be considered!

Your explanation makes sense though because LT kept contradicting this by urging us to put the 2nd payment down to take it off the market. . .

[Spicerack Debate]

Stella Creasy MP is campaigning to end double charging by estate agents of fees to landlords and tenants. There was a vote in parliament on 16 June. Her suggestion was to write to our MPs.

http://www.workingforwalthamstow.org.uk/consumer-rights-bill-update-labour-speaks-up-for-small-businesses-and-tackles-rogue-estate-agents-log-book-loans-and-ticket-touting/

[miss_mystra]

*sigh*

I wish i had found this thread sooner - dealing with them at the moment and I am so stressed out :(