23 Oct RIP Tenant Fees
The Tenant Fees Act 2019 came into force on the 1st June 2019. There are now only a few permitted payments can be charged to tenants for new tenancies that started from the 1st June 2019. For existing tenancies, only fees that are written into the agreement can be charged (and these will not be possible from 1st June 2020). This applies to anyone charging a fee in connection to a tenancy – not just letting agents. It is not possible for a landlord to pay an agent’s fee only to then pass the cost onto the Tenant.
Generally, laws written in the UK are on the basis that everything is permissable unless it is prohibited. This Act is different. This Act states exactly what payments are permissible – anything else is a prohibited payment.
So, here’s what can be charged for any Assured Shorthold Tenancy, tenancies for student accommodation and licences to occupy housing in the private rented sector:
- the rent
- a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
- a refundable holding deposit (to reserve a property) capped at no more than one week’s rent
- payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
- payments associated with early termination of the tenancy, when requested by the tenant
- payments in respect of utilities, communication services, TV licence and council tax
- a default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement If the fee you are charging is not on this list, it is a prohibited payment and you
This is great news for tenants and it does mean that, in general, tenants will feel that they are being treated more fairly. Unfortunately it will also mean that, for many landlords, there will be an increase in costs to them as agents are no longer able to charge part of the fee to deal with a tenancy to the tenant. Here at Robinson Reade, we have taken the decision to keep our set up fees unchanged.
Don’t panic though, you are still able to make a claim upon the tenant’s security deposit for any damage to the property during the tenancy (assuming there is provision in your tenancy agreement for this of course).
The fines for breaching the Act are prohibitive. The local Trading Standards Office has the job of enforcement and they can fine £5000 for each breach. So, if a Landlord charges six students a prohibited fee under one tenancy that’s six breaches and a fine of 6 x £5000. It should be noted that the first breach will be treated as a civil offence and any further offence within the next five years will be a criminal offence with an unlimited fine.
If you’d like to know more feel free to give us a call… we’d love to chat.
Emma Macgregor MARLA
PS: if you are looking for a ‘smart let’ (www.robinsonreade.co.uk/quick-let-or-smart-let/) call us today on 01489 579009 or email us at email@example.com for honest, expert and friendly advice.