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Call of the Week- Tenant Fee Ban in England: pre-existing tenancies and deposits

Call of the week

As we approach June 1st 2019 a number of our members are calling the Landlord Advice Team to seek further clarification on the upcoming ban on tenant fees in England.

The Landlord Advice Team is happy to help with these queries as it is a major change to the industry and we want to help our members prepare as best as possible.

This week’s caller was concerned about his pre-existing tenancies, specifically the deposit and what he should be doing with it.

This landlord’s focus was the student let markets.  Signing up tenants in January/February 2019 to commence in September 2019.

The member was concerned that he had already signed up and taken deposits for tenancies that commenced after the fees ban.  These deposits were the equivalent of 8 weeks in rent, 3 weeks over the maximum cap set by the Tenant Fees Act.

We informed the member that the important date for the Tenant Fees Act is the date the tenancy is agreed, not the date it commences on.  As such, the deposits he had taken in this case would still be permitted.

We also informed the member that provided he did not renew the tenancy expressly (ie giving a new contract) then he would not need to return any money in the first year after the tenancy began.

This is because for older tenancies, payments are only prohibited if the payment is requested on or after June 1st 2020, paid on or after that date, and that payment is then not returned within 28 days.

We then checked if the member was using a tenancy that turned into a statutory periodic tenancy or a contractual continuation at the end of the fixed term.

Unfortunately the member’s agreements turned into statutory periodic tenancies.  This means that,  as per the ruling in Superstrike, the deposit is actually considered to be returned and received at the commencement of the new tenancy.  This meant that when the tenancies went statutory periodic, the landlord would have to return 3 weeks worth of the deposit.

This is not a problem that affects contractual periodic tenancies such as ours, as they are part of the same original tenancy as the fixed term.

Rupinder Aujla, LAT Manager, said ‘We’re always happy to provide advice on this to our members.  The Tenant Fees Act has a number of tricky areas to navigate and this is just one example of why it’s so useful to have a membership of an association to provide assistance with preparing for the fees ban.’

Learn more about the Tenant Fees Act

  • Want to learn more about the Tenant Fees Act in England? Read our online guide for landlords here.
  • In you’re a landlord in Wales read our update on the tenant fee ban in Wales here. This week it was announced that the fee ban in Wales will next be debated on 19th March.
  • If you have a question relating to the fee ban , or perhaps another issue relating to a tenancy, then our Landlord Advice Team will be happy to assist. You can give us a call on 03330 142 998

About the author

Landlord Advice Team

Landlord Advice Team

On-demand phone support from the RLA Landlord Advice Team is a big feature of RLA membership and is seen by many of our members as the most important service we offer. You can call the Landlord Advice Team in total confidence and be assured that the advice you'll receive is friendly, pertinent, up-to-date and practical.

Access to the RLA's Landlord Advice Team is FREE for all RLA Members.

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