With just days to go until the Tenant Fees Act comes into force in England, many landlords have been giving our team a call, looking for advice relating to the new legislation.
The RLA has published a guide for landlords on what there is to know about the Tenant Fees Act.
Here, we take a look at the answers to some of the commonly asked questions that landlords and letting agents are asking.
Question: What fees can I still charge once the fee ban has come into force?
Answer: Our updated tenancy agreements reflect which fees can be charged by landlords. These include charges in the event of lost keys or security devices, charges where the tenant approaches the landlord for a change in the tenancy or an early surrender of the tenancy, interest on rent arrears after 14 days. Of course, the tenant fee ban in England is being introduced in two stages, and it will only apply to all existing tenancies from 1st June 2020. More on this here.
Question: Can I still use a zero-deposit scheme or other deposit alternative?
Answer: Yes, so long as you provide the tenants the option to use a traditional deposit and leave the final decision up to the tenant. This is because in this situation it is the tenant’s choice to pay a prohibited payment where the option for a permitted payment is present.
Question: Can I take a holding deposit, when must I deal with this deposit by if I do take one?
Answer: You can take up to 1 weeks’ worth of rent as a holding deposit and can take 1 deposit per property. You should enter into a tenancy agreement within 15 days of taking a holding deposit unless for a relevant reason you or the tenant cannot enter into the agreement. In such a situation, the deposit is either returned to the tenant, or retained by the Landlord or Agent depending on the circumstances.
Question: I understand that from the 1st June this year, deposits will be capped to five weeks where the annual rent is below £50,000. I currently hold a deposit for an existing tenancy that exceeds the five week threshold. As of the 1st June 2020, when the Tenants Fees Bill will apply to existing tenancies, would I have to refund a portion of the deposit to the tenant so that only hold five weeks rent is held as a deposit?
Answer: No you don’t, new Government guidance clarifies this issue by stating that deposits do not need to be returned that is over the cap for fixed term agreements entered into before the Tenant Fees Act came into force. However it is important to note that if a tenant renews their tenancy by signing a new fixed term agreement after 1st June 2019, any amount of their existing deposit which exceeds the five-week limit must then be refunded. Any statutory periodic tenancy created on or after 1st June 2020 should return any deposit amount above the cap within 28 days. More on this in our guidance.
Question: I have a tenancy that has been signed, however the tenants do not move in until September as they are students. I did charge some small fees-will I now be required to pay these back to the tenant?
Answer: No, you will not be expected to repay any fees, because the fees were taken before the commencement of the Tenant Fees Act, on the 1st June 2019.
Question: Does the ban being introduced on 1st June 2019 apply to my property in Wales?
Answer: No, as the Welsh Government are planning on banning fees, however in Wales this is due to be introduced in September, under a different piece of legislation; The Renting Homes (Fees etc.) (Wales) Act 2019.
Question: If a tenant doesn’t give a landlord the property back in the same condition as it was when the tenancy first started, what rights does a landlord have in terms of being able to charge cleaning or repair costs?
Answer: The act doesn’t prevent you getting your costs back for any damages. If they don’t give you the property back in the same condition you can deduct cleaning from the deposit. Make sure to have a good inventory at the start and it’s best to remind them to clean before they move out.
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