New rules from the 1st of June 2019, mean that landlords and letting agents in England are banned from charging admin fees to tenants. This information below provides a ‘need-to-know’ overview of the new restrictions. Prohibited fees under the Tenant Fees Act 2019 include the likes of referencing fees and credit check fees. But rather than listing the various fees that are prohibited, it’s easier to list those that aren’t:
- Rent. Of course, but even rent comes with some new restrictions; whereby if the amount of rent payable in a period exceeds the amount of rent payable in respect of any later period, the difference between the two amounts is prohibited.
Confusing, we know. Landlord’s Guild has a lot more information on these restrictions, see section 4.1 at this link: https://www.landlordsguild.com/understanding-the-tenant-fees-act-2019/
Other permitted fees (and their restrictions) include:
- Utilities and council tax.If included within the tenancy.
- A refundable deposit. But the important bit? This will be capped at six weeks’ rent. Or even five weeks’ rent for properties where the annual rent is less than £50,000.
- A refundable holding deposit to reserve the property. This will be capped at one week’s rent.
- Changes to the tenancy. Specifically, those requested by the tenant. Again, these will be capped at £50 (or “reasonable costs”).
- Early termination of the tenancy requested by the tenant.
- Any variation, assignment or novation of the tenancy requested by the tenant.
- Defaults by the tenant. Including late payment fees and key replacements; these must be deemed “reasonable costs” and must be backed up by evidence in writing by the agent or landlord.
- Cost of damages for breach of a tenancy agreement.
- Television license costs, where included in the tenancy agreement.
The new rules, which currently only affect England (with the ability to extend to Wales in the future), apply to all assured shorthold tenancies, licenses, and student lettings. They also only apply to all new tenancies (and renewals) from the 1st June 2019 onwards.
What’s more, landlords or agents found to be charging fees that aren’t included in the above may find themselves with a £5,000 fine. And that’s just for a first-time offence; if caught again within five years, they could face a possible unlimited fine.
Again, Landlords Guild has a whole host of information on the ins and outs of the Tenant Fees Act 2019 in their article ‘Understanding the Tenant Fees Act 2019’. Or you can download the guidance documents for landlords/lettings agents or tenants, from the Ministry of Housing, Communities & Local Government, here.