The Government has published a draft Tenant Fees Bill, which details plans to ban letting agent fees paid by tenants.
The proposed agent fee ban will mean that tenants in England will no longer have to pay anything other than rent and a refundable deposit.
A consultation has also been launched by the government today, on making membership of client money protection schemes mandatory for letting and managing agents that handle client money.
The Bill will include:
- Holding deposits should be capped at no more than one week’s rent, and security deposits should be no more than six week’s rent.
- Letting agents who breach the ban for the first time could be fined up to £5000. In cases where an agent is fined and convicted of the same offence within the past 5 years, this will be regarded as a criminal offence and penalties of up to £30,000 could be issued.
- Trading Standards will be required to enforce the letting agent fee ban
- Appoint a lead enforcement authority in the lettings sector.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
Alan Ward, RLA Chairman said: “It is welcome that greater clarity is being provided to the sector and that Ministers have clearly listened on a number of important points. Most notably, proposing to cap security deposits at six weeks rather than one month recognises concerns about the need to ensure protections against tenants’ default on rent payment and damage to property.
“Ultimately though, cutting costs for tenants means boosting the supply of homes for rent. Whilst we recognise the Government’s objectives, this would best be achieved by using the Budget to encourage good landlords to build more homes.”
Since it was announced in the Autumn Statement last year, the government held a consultation on the proposals to ban letting agent fees, which the RLA contributed to.
Communities Secretary Sajid Javid said:”Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit.
We’re delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters”
In our consultation response, the RLA raised concerns about the impact the ban will have on landlords and tenants, who could see their rents rise as a result.
Further details of the draft Tenant Fees Bill can be found on the government website.
For an in-depth look at this draft Bill please read the RLA Policy Director David Smiths’ blog post on the letting agent fee ban.