Estate agency fees in rentals: what's legal

It's one of the questions we're asked most, and rightly so: you're going to rent a flat, an agency appears in the middle and someone has to pay for its work. Who? How much? And what if they ask you for odd things? Here's what the regulations say and how to protect yourself.

Please note: general, educational information, not legal advice. Regulations can change; when in doubt, consult a professional.

Who pays the commission: the landlord

The current rule is clear for home tenancies: estate agency management costs and contract formalisation costs are borne by the landlord — that is, by the property owner. The agency is hired (and paid) by whoever puts the flat up for rent.

This means that, as the tenant of a permanent home, they mustn't charge you the agency's commission. If an estate agency asks you for a month's rent (or any amount) "for their fees" to rent you a flat where you're going to live, be suspicious: ask for it in writing and check it before paying anything.

As a landlord, on the other hand, the commission is your cost of delegating: tenant search and selection, viewings, the contract, deposit management and, as agreed, administration during the tenancy.

How much it usually costs

There's no official fee scale: fees are freely negotiated between the landlord and the agency. In market practice, the usual thing is for the commission for renting out a flat to equal one month's rent (plus taxes), although it varies by area, property type and services included.

What matters isn't just the how much, but the what's included:

• Just the tenant search, or also the contract and deposit management?
• Is there subsequent monthly administration? How much does it cost and what does it cover (rent collection, breakdown management, tenant liaison)?
• Is there a tie-in period or a penalty if you want to end the management?

Always ask for an itemised written quote before signing the mandate. A serious agency gives it to you without fuss; one that refuses is already telling you something.

What they CAN'T charge you (as the tenant)

On top of the commission, there's a list of charges you should look at closely if you're a tenant:

• "Management costs" or "formalisation costs" added to the rent or the deposit. If you're a residential tenant, they belong to the landlord.
• Payments to view the flat. Charging to show a rental property is a bad sign, and in several regions it's considered an abusive practice.
• Insurance imposed by the agency. They can offer you insurance, but not impose it as a condition for renting.
• The deposit above the legal minimum disguised as an undocumented "reservation" or "holding deposit". Every payment must have its clear concept and its receipt.

And a classic: the "piso gancho" (a "bait" listing). If the advert is suspiciously cheap for the area and when you call they say "that one's just been let, but we have others", it probably never existed. Stolen photos from other adverts are another warning sign.

How to spot an unserious agency (landlord and tenant)

1. It gives you nothing in writing. Neither the mandate, nor the fees, nor the conditions. Run.
2. It asks you for money before showing you anything (the tenant) or before lifting a finger without a contract (the landlord).
3. It doesn't check the other party. An agency that doesn't ask the tenant for documentation isn't going to defend your interests as a landlord either.
4. It pressures with "there's huge demand, decide today". Haste is the favourite tool of those who don't want you to read the small print.
5. It doesn't issue invoices. Every payment to an agency must come with an invoice. Without an invoice there's no proof of anything.

Golden rule: in rentals, paperwork protects both sides. Tenant: don't pay anything without a receipt and without a contract. Landlord: don't commission anything without a signed quote.

What to do if you've already been charged something improper

Keep all the evidence: adverts, messages, payment receipts, the contract. Complain first in writing to the agency. If there's no response, the usual routes are the hoja de reclamaciones (the official complaints form, compulsory in the Comunitat Valenciana for agencies), consumer associations and, where applicable, the regional consumer bodies. Don't let time pass: complaining late is complaining badly.

Looking to rent or let your flat in Cullera or La Safor with clear accounts from minute one? At Llevant Patrimonial we work with closed written quotes: the landlord knows what they pay and the tenant knows what they don't have to pay. Opening soon. And if you're just starting out, review the rental contract types and who pays what in a rental.