A new law that could save some tenants hundreds of pounds has recently come into force.
The tenant fees ban was introduced on 1st June 2019, but after a 12-month transition period, it now applies to new tenancies as well as existing tenancies.
This means that landlords and letting agents are unable to charge for a range of admin fees that they previously had, which includes things such as property viewings, credit checks, references, and renewal fees.
The Tenant Fees Act first came into force on 1st June last year, which put an end to fees for millions of renters across the country.
However, it only included those who signed an agreement after 1st June 2019, but now all renters are included – and, where charges apply, your landlord will have to cover it.
Under the new law, which covers assured shorthold tenants and student accommodation, deposits will also be capped at five weeks’ rent, and holding deposits will be limited to just seven days’ rent.
What are landlords and letting agents no longer allowed to charge for?
- To view a property
- For a reference or credit checks
- Insurance policies
- Guarantor requests
- For costs to cover “admin” including things like referencing, credit checks and guarantors
- Renewal fees for tenancies
- Charging for a professional clean, unless they have good reason – and evidence – to
- Gardening services
Any breach of the fee ban will incur a penalty of up to £5,000. Successive breaches can result in a criminal offence and an unlimited fine.
What can landlords and letting agents still charge for?
- Holding deposits (a maximum of 1 week’s rent)
- Deposits (a maximum deposit of 5 weeks’ rent for annual rent below £50,000, or 6 weeks’ rent for annual rental of £50,000 and above)
- Payments to change a tenancy agreement eg. change of sharer (capped at £50 or, if higher, any reasonable costs)
- Payments associated with early termination of a tenancy (capped at the landlord’s loss or the agent’s reasonably incurred costs)
- Utilities, communication services (eg. telephone, broadband), TV licence and council tax
- Interest payments for the late payment of rent (up to 3% above Bank of England’s annual percentage rate)
- Reasonable costs for replacement of lost keys or other security devices
- Contractual damages in the event of the tenant’s default of a tenancy agreement
- Any other permitted payments under the Tenant Fees Act 2019
Which fees have been capped?
- Leaving your tenancy early – capped at the amount of rent you would have paid until the end of your tenancy
- Holding fees – capped at one week’s rent and then must be refunded once you’ve signed the agreement
- Contract changes – capped at £50
- Late payments – capped at 3% more than the Bank of England base rate for every day the payment is late, as long as late payment charges are written into your contract
- Deposit – capped at five weeks’ worth of rent
For more information on the Tenant Fees Act, read the Government’s official guidance.