Wednesday brought the promised draft bill on banning up front fees paid by tenants and capping deposits. The bill proposes to apply the ban to assured shorthold tenancies and licences to occupy in the private rented sector, and prohibits all payments except rent, security deposits and holding deposits.
The ban applies to both agents and self-managing landlords. The bill also specifically prohibits landlords and agents requiring tenants to pay for third party services, such as referencing or an inventory, in order to secure a tenancy. The increase of the security deposit cap from the initial 4 weeks rent to 6 provided a tiny glimmer.
The bill also outlines the enforcement regime. Local authority trading standards will enforce the legislation, with a civil penalty of up to £5,000 awaits for a first breach. A repeat breach within 5 years will be a criminal offence, with a fine of up to £30,000 available as an alternative to prosecution. There is a procedure to recover unlawful fees paid by a tenant. Appeal will be to the First Tier Tribunal.
The bill also deals with compulsory client money protection and extends fee transparency legislation to property advertised on online portals. The bill will be next be examined by the Communities and Local Government Committee.
The RLA remains concerned the effect of the bill will simply be to shift the cost of fees from tenants to landlords, then back to tenants via rents, and will be briefing MPs ahead of scrutiny by the CLG committee.
On Monday, it was the turn of Communities and Local Government to answer MPs’ questions in the House of Commons. Housing featured heavily, with Conservative MP, Theresa Villers, asking what steps the government are taking to promote longer term tenancies in the PRS. The Secretary of State, Sajid Javid reaffirmed his conference assertion that measures would be brought forward in the forthcoming Budget.
Reflecting motions adopted by a number of Labour councils, Bristol MP Thangam Debboinaire complained that students paid no council tax, and asked the government to look at bringing student lets into the business rates regime. In a rare bright spot for landlords, CLG Minister, Marcus Jones, stated the government had no such plans.
Former housing minister, Mark Prisk MP, asked the government to avoid unnecessary duplication when bringing forward legislation to regulate lettings and managing agents, while Barry Sheerman MP raised concerns about illegal subletting in social housing – an issue that also creates problems for private landlords.
Meanwhile, the Liberal Democrats released Freedom of Information data showing that 6 out of 10 councils had failed to prosecute a single landlord over the last year. The survey of councils’ housing inspection and prosecution powers, reflect similar results from the RLA’s own research in this area, and supports our call for better enforcement of existing legislation, rather than new regulations.
Fire safety and product recall was the focus of both the Business, Energy and Industrial Strategy committee evidence session on Tuesday and a debate initiated by Bow and Polar MP, Jim Fitzpatrick on Wednesday, who highlighted the fact that 3 fires a day involve tumble dryers.