This week we helped one of our members with their query relating to the upcoming Tenant Fees Act, and whether or not they could refer to recovering their legal costs in their tenancy agreement.
Landlords are still able to pursue their tenants for damages as a result of a breach of tenancy. There is nothing in the legislation which prohibits this. What landlords will be unable to do will be to include a fixed fee which will be charged in the event of a breach occurring, a default payment.
However, whilst the legislation prohibits most types of payments, and this includes default payments, it still allows for default payments for breaches of the tenancy relating to loss of keys and charging interest on rent where the arrears have been owed longer than 14 days.
As a result of there being some situations where default payments are allowed and otherwise not this has created some confusion, even in the guidance from the government itself.
Therefore, a clause which makes it clear to the tenant that in the event of a breach of tenancy they can be made liable to pay the landlords legal costs should not be a prohibited payment, so long as an exact fee is not specified. We do not believe it is the intention of this legislation to prohibit the ability to claim damages from a tenant. This will require court cases to make absolutely clear however, and is based on our current understanding at this time.
Rupinder Aujla, LAT Team Manager had this to say, “It is important in the ever-changing industry that we find ourselves in that our members stay up to date and are prepared for the upcoming legislative changes. The advice team is always on hand to help our members with this.”
To learn more, read the RLA’s Tenant Fees Act guidance here.