Regulation and Enforcement

Tenant Fees Bill : Frequently Asked Questions

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Sally Walmsley
Written by Sally Walmsley

Since the RLA published its guide to the tenants’ fees bill there have been a number of questions and comments from members looking for clarification on what they can – and can’t charge for. 

Here we look at some of the commonly asked questions. 

What can I charge for? 

In short you can charge for rent and deposits and if a tenant defaults on the contract. There are two other default fees outlines in the ‘exemptions’ section below, but these charges will be limited by the new legislation. 

Which fees are banned under the new rules? 

In short that pretty much any fee that is in the tenancy agreement at present will be void (unless it is exempt). 

Examples of banned fees include, but are not limited to: 

  • Charging for a guarantor form 
  • Credit checks 
  • Inventories 
  • Cleaning services 
  • Referencing 
  • Professional cleaning 
  • Having the property de-fleaed as a condition of allowing pets in the property 
  • Administration charges 
  • Requirements to have specific insurance providers 
  • Gardening services 

Which fees are exempt? 

Exemptions to the bill exist for: 

However, all four are subject to additional restrictions as part of the legislation. 

  • You may also charge for changing tenants or allowing tenants to leave the property early (subject to restrictions on costs). 

There two other ‘default fees’ you will be able to charge, if either: 

  • the tenant loses their keys or  
  • is late paying the rent.  

Again, there are rules limiting these charges. 

If I can’t charge a higher deposit, could I introduce a higher rent band for tenants with pets?  

Under the bill deposits are limited to the equivalent of five weeks rent (if the annual rent is less than £50,000) so you will no longer be able to charge more for tenants with pets. 

In short it is unlikely that a ‘two-tier’ rent systems would be allowed as the ‘with pets’ rate could be considered a fee. 

Could I charge a high level of rent in the first month to cover my increased costs? 

No. Setting a higher rent for the first portion of the tenancy and then dropping it down afterwards is prohibited. 

However, the ban DOES NOT prevent you increasing the rent permanently. The government believes landlords will be loath to do this as potential tenants will simply go elsewhere.  

What if the deposit I hold now is higher than five weeks. Do I need to refund the money if the tenant renews their tenancy? 

Yes, when the contract is renewed you would need to reduce the value of the deposit you are holding to five weeks’ rent. However, if you sign the renewal tenancy agreement before June 1st then you will not need to do this for the entirety of the fixed term. 

Are there any changes when it comes to the level of holding deposit I can charge? 

Yes, holding deposits will be limited to a maximum of a week’s rent and subject to statutory legislation on the repayment of this should the tenancy not go ahead.  

Briefly, this is proposed to be: 

  • The landlord has 15 days to make a decision once a holding deposit is taken. 
  • If the tenancy does not go ahead then the money must be repaid in full within seven days of the deadline being reached or the landlord backing out. 
  • Repayment does not need to be in full if the tenant backs out of the tenancy agreement themselves, fails right to rent checks, has provided false or misleading information, or where the landlord tries their best to get the information needed but the tenant fails to provide it within the 15 days. 
  • If the tenancy does go ahead, the holding deposit must be returned within seven days of agreement, unless it is converted into part payment of the actual deposit or used towards the initial rent payment. 

My tenant lost their keys and called me in the middle of the night to let them in. Can I charge them for this? 

In the case of lost keys, you will be able to charge for the cost of replacing them and reasonable costs. 

These costs MUST be evidenced in writing, for example through receipts for the keys and petrol used etc. You cannot charge for your time or the inconvenience, other then in ‘exceptional circumstances’.

The government guidance says: “Generally, we do not consider it reasonable for landlords or agents to charge for their time under a default fee. In exceptional cases, it may be appropriate, but the onus will be on the landlord or agent to demonstrate that they have incurred business costs as a result of the default.

What happens if I make a mistake? 

The consequences for charging a fee that is not permitted are far reaching. 

Tenants will be able to reclaim the money they have paid via the county court – with interest – and trading standards will be able to fine you up to £30,000. 

You will also be unable to serve a Section 21 notice if you have charged a tenant a fee where you shouldn’t have AND kept the money. 

If you realise you have levied a charge that you shouldn’t have done you should repay it at once.  

You are only in breach if you make the charge, take the money AND keep it. 

For a full guide to the tenant fees ban visit www.rla.org.uk/feeban 

If you have any other queries about your responsibilities call the RLA advice team on 03330 142998. 

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and award-winning Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

9 Comments

  • I really cannot believe the extent of this ban! I thought when it was first rumoured, it was a fair change to legislation as admittedly some agents especially, had charged extortionate fees etc to both tenants and the landlords. However, this legislation has gone above and beyond that!! I always charged a modest fee to complete referencing checks (fee cost to me plus £20 for a couple, to cover the processing of them – often took over 2 – 3 hours especially when not all info provided). The beauty of this, is that it prevented tenants lieing on the application form, as they knew if they were found out, they wouldn’t be accepted and therefore forfeit the fee. Now, this merely encourages people who would choose to be deceitful to ‘try their hand’ as there is no financial penalty if they don’t get accepted! How is that fair?

    If someone wants to apply for a property from me once this comes into force and they have a pet. If the rent is advertised at £600 a month, does the legislation preclude me from letting to the tenant with pet for £620?

    I advertise online using a company who has a facility to get the applicant to fill out their credit reference form themselves and pay the fee to the credit referencing company. Is this prohibited aswell?

    I look forward to hearing back from you.

    Ian

    • Hi Ian

      It’s not strictly correct that tenants who lie face no penalties. Landlords do not have to return the entirety of the holding deposit where the prospective tenant has provided false or misleading information. As such if you ask for confirmation that the applicants have no CCJs, etc and the credit check shows they do, then you can keep the costs of these checks.

      As for your question about rent, yes that should be prohibited under the legislation. However you can ask them for a fee to agree to vary the terms of the tenancy at their request.

      Kind regards
      James

    • Hi Maria, The legislation will not impact on periodic tenancies that exist before June 1st 2019 immediately. The legislation will come into force from June 1st 2020 for these tenancies. The situation for contractual periodic continuations is unclear due to poor wording in the legislation. It is likely however that a tenancy that starts as a fixed term before June 1st 2019 and then moves into a contractual periodic tenancy after June 1st 2019 will not be caught at all by the legislation.

  • With the tenant fees ban starting on the 1st June I think that now would be a good time for the government to introduce a public register that can be accessed by anyone to check if a particular individual has a current CCJ
    The government has banned the fee we normally charge to find out this information and so it’s only fair that we have a free register.
    Who will champion the cause? RLA/NLA?

  • The local authority pay me a ” finders fee” for taking homeless tenants and issue a 2 month bond instead of a cash deposit. Reading the bill these incentives are exempt?

  • Hi

    Please explain in detail about the cleaning/professional cleaning.

    It is just not enough to have 5 weeks deposit money. This will not cover the rent arrears/damages/cleaning. Why doesn’t RLA put their foot down and say not negotiable instead of supporting this bill/ fight for this? RLA’s answer is it was already there but this is not correct. There was no where 5 weeks deposit. This is the only thing we had to cut our losses. This 5 weeks deposit is not workable in real life with real tenants. Deposit is protected in any event and disputes are dealt with by the scheme so its not as if the LL can screw the tenants.

    As for tenant’s affordability for larger deposit. Most responsible tenants can afford more deposits and are willing to pay this. This should be left to tenants and LL and not interfere in free market. If prospective tenant do not want to pay or can’t afford to then look for a cheaper place. This has all gone too far. The tenants have always had the upper hand .They pay the rent if they feel like it. They know we can’t get possession until court which is 6 months. Even if this new court business comes in, I can guarantee now, we are not going to get possession in 5 weeks.
    So that leaves us with damages and cleaning. Who pays for this?

    Does this mean we give them the flat as it ? Which ever way, the last tenant left it, then we get caught out by Karen’s bill /not fit for humans. Is this fair?

    When I hand over a clean flat then I expect it to be returned the same way. What do we do when the tenant does not return it clean, we are not allowed to charge for cleaning? Am I expected to clean after them ? How insane is this? Next there shall be requirement for us to wipe their bum and if you don’t do it £30.000 fine.

    At least with 2 months deposit there was a bit of incentive for the tenants to clean / look after the place otherwise it would be deducted from their deposit. What is there now for the tenant to keep the place clean ? Tenant will not pay last month’s rent and the 4 to 5 days/amount reaming of their deposit could go on replacing an item/s they have taken from the property or for small repair/s. It will not even cover a new mattress cost which was given to them brand new and now soiled.

    Now we are not allowed to charge for cleaning then who is supposed to do the cleaning? Please RLA answer this question for me. Do we give it to the next tenant a dirty flat?

    5 weeks deposit is just not enough please RLA overturn this. You are supposed to protect LL by that I mean it needs to be fair on the LL.

    LL have taken lot of abuses in the last few years and don’t say as “Good landlords have nothing to worry about” I am a very good/ fair landlord and I am extremely worried. As it is I am just about breaking even with the new tax grab and now with this deposit cuts, I can’t charge them for cleaning.

    • Good afternoon Rita

      The RLA has opposed this bill strongly from the start as, much like you, we feel it unfairly punishes good landlords. Unfortunately, as hard as everyone in the sector tried, the government was determined to bring this legislation in.

      As to your question regarding damages, I’m afraid it will be the deposit which is intended to make up the cleaning costs. The bill allows you to seek to recoup your losses from any damages that arise as a result of your tenant failing to adhere to the contract. As such, if you provide a property that is cleaned to a professional standard and your contract states that you expect it to be returned in the same condition, then if the tenant does not professionally clean your property then you are still free to make deductions from the deposit to have it professionally cleaned. Similarly, if your deposit does not cover this amount then you are still entitled to sue the tenants through the courts for outstanding losses. Probably the best tip for landlords who are concerned regarding this is to get a UK homeowner as a guarantor. Then you would have someone with assets that you could chase for outstanding damages.

      Kind regards
      James

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