A recent Act of Parliament has brought changes to the way in which Landlords and Agents can charge tenants for the services provided before and after tenancy.
The Tenant Fees Act 2019, which came into effect in June 2019, brings England into line with the rules in Scotland, where letting fees had already been outlawed. A ban was also brought into effect in Wales in September 2019, under different legislation. The Act applies to all tenancies signed after 1st June 2019. Existing tenancies are not covered by the Act, and still charge fees, until 31st May 2020, when the Act applies to all tenancies. The key change made by the Act was to ban all fees charged to tenants unless otherwise permitted by the Act. Permitted fees include rent, a refundable holding deposit, utilities and other payments such as Council Tax.
Even if fees are permitted by the Act, restrictions also apply to these fees. For example, holding deposits can only be up to one week’s rent and tenancy deposits are restricted according to the amount of annual rent. For all tenancies where the rent is below £50,000, the limit is 5 weeks deposit. For rents of up to £100,000 the limit is 6 weeks rent. The deposit, in accordance with the deposit protection legislation, must be held in a designated deposit scheme and be returned within 30 days. Any fee that is not defined in the Act cannot be charged to the tenant; these include property viewing and referencing fees, guarantor set up fees, right to rent checks and cleaning fees.
Non compliance with the Act can incur fines for the Landlord, and persistent breaches are a criminal offence. The tenant will also have civil remedies that they can bring against the Landlord.
If you are a landlord wanting to ensure your tenancies comply with the Act, or if you are a tenant has unlawful fees, our Dispute Resolution Department will be happy to assist. For more information, or to book a £95 fixed fee initial meeting, please contact 01189589711 or e-mail Chris Miller at email@example.com.