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Tenant Fees Ban: One month to go

Victoria Barker
Written by Victoria Barker

On 1st June 2019, the Tenant Fees Act will come into force in England.

Initially, when the Act comes into force, it will only apply to new tenancies and renewals of tenancies, excluding statutory and contractual periodic tenancies that arise after 1st June 2019. After one year, in 2020, the ban will attach to pre-existing tenancies.

In this article, we have compiled some helpful resources for landlords and agents. You can also read a recent blog written by our Policy Director David Smith on optional and default fees here.

What is the Tenant Fees Act?

The Tenant Fees Act will make it illegal for landlords and letting agents to charge any fee other than rent, deposits, holding deposits and charges for defaulting on the contract.

However, all four of these are subject to additional restrictions as part of the new legislation, and landlords and agents will need to be mindful of these changes.

Does the fee ban apply in England and Wales?

In Wales, the tenant fee ban is due to come into force in September.

The RLA will be publishing guidance specifically on the fee ban in Wales for landlords and agents, in the coming weeks.

What fees will be banned?

Most fees, unless they are exempt, will be banned.

This includes: Credit checks, cleaning services, inventories, admin charges and gardening services. For the full list of banned fees, read the RLA’s tenant fee ban guidance. R

What additional restrictions will the Act bring in?

One of the main restrictions the Tenant Fees Act will bring in will be the amount that landlords and agents can charge for deposits. Deposits will be limited to five weeks rent as a maximum amount, for tenancies where the annual rent is below £50,000. If the annual rent is above this, then the maximum deposit that can be charged is six weeks rent.

The RLA’s partners TDS have produced a useful deposit cap calculator, which landlords can use to calculate how much deposit they are able to charge under the Tenant Fees Act. To use the calculator, click here and scroll down to the “deposits” section.

Holding deposits will also be limited to a maximum of one week’s rent, and subject to statutory legislation on the repayment of this, should the tenancy not go ahead. More on this can be read in the RLA’s guidance.

Rent restrictions

Landlords and agents will also not be able to set rent at a higher level for the first portion of the tenancy, and the drop it down afterwards. However, charging a higher rent than you would normally charge for the property, that is consistent throughout the tenancy, is fine.

What are the penalties for non-compliance?

Where a breach has occurred and a banned fee has been taken, tenants will be able to get any money wrongly paid back, via the county court. For a first offence, a fine of up to £5000 can be charged. However subsequent breaches could see landlords and agents faced with a fine of up to £30,000.

Government Guidance

Last month the Government published guidance on the Act. There are three guides in total, one for landlords, one for tenants and one for councils. This guidance can be read online here.

Do you have more questions?

To learn more, you can read the RLA’s Tenant Fee Ban Guidance for landlords and agents here.

RLA members can access unlimited one to one advice. If you have questions about the upcoming tenant fee ban or anything else relating to your tenancy, give our advice team a call today.

About the author

Victoria Barker

Victoria Barker

Victoria is the Communications Officer for the RLA.

She is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and media review, and creating social media content. She also contributes to our members magazine, Residential Property Investor.

3 Comments

  • So, will supermarkets be banned from charging for operating costs, as they too, provide an ‘easential’ service in the supply of food?

    The UK really has become a lunatic asylum. It is not a worthy country in which to live or invest.

    One word sums up the way it is run:

    Pathetic

  • This increases landlords costs while making it easier for tenants to move on. Best advice is for everyone to charge higher rents to cover the cost, however, I can’t see how consistency would be possible between landlords. If we succeed then expect rent controls to follow! Doomed either way.

    I hope that landlords get something positive from the government. Abolishing the slow, expensive and inefficient court system for removing problem tenants is becoming a priority. It’s not me that suffers from bad tenants, it’s tenants adjacent to my flats who have to put up with noisy, messy or drug-dealing idiots who spoil it for the whole block.

    I would like to see much more effective campaigning about dealing with bad tenants. I pay my RLA fee, but don’t get the feeling that our representation to parliament has been much use. The tenant side have been much better at pushing their case, and of course, there are a lot of them when it comes to voting.

    • The RLA is meeting regularly with government to push landlords’ rights when it comes to the new possession process and what it will look like, with the latest meeting at number 10 just this week.
      We have surveyed members on the issue, with more than 6,000 responding, so that when it comes to making representations to government we have solid arguments that can be backed up with hard evidence.
      Indeed RLA research reports and submissions to government were cited in debates in Parliament 49 times in 2018.
      The government knows it has to capture to the tenant vote, with almost a quarter of households to be living in the PRS by 2025, but it cannot afford to ignore the landlords it is relying on to provide these homes – a point we have made robustly at the highest level.

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