TENANTS FEE BAN

This came into force with effect from 1st June 2019 and effectively prohibits Landlords and Agents from making charges to tenants.   Further information about the Tenants Fee Ban can be found at:-

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791273/TFA_Guidance_for_LandlordsAgents.pdf

Prohibited Payments:

  • Application Fees
  • Tenancy set up costs
  • Referencing of tenants and referencing for future landlords
  • Contract negotiation
  • Inventory/Schedule of Condition

A breach of the fees ban will be a civil offence with a financial penalty of up to £5,000.

Permitted Payments:

  • Rent
  • A capped refundable Tenancy Deposit
  • A capped refundable Holding Deposit
  • Payments in the event of a default
  • Payments on variation of a tenancy
  • Payment on early surrender of a tenancy
  • Payments in respect of utilities, including council tax, telephone/television/internet services
  • Green Deal charges.

Tenancy Deposits: The deposit will now be capped at the equivalent of 5 weeks rent where the annual rent is less than £50k and 6 weeks rent where the annual rent is greater than £50k.Agents will not need to refund the existing deposits held that are over five or six weeks rent and can hold this for the duration of the existing tenancy.

Under the Tenants Fee Act, landlords and agents will no longer be able to take higher security deposits for tenants with pets or insist that carpets are professionally cleaned at the end of a tenancy.  The Tenants Fees Act does not prevent landlords and agents claiming damages for breach of the tenancy agreement, so damage done by the pets can still be claimed for.  If the deposit isn’t enough to cover the damage, landlords will have to consider legal proceedings.

A property can be advertised at two different rents, one for tenants with a pet and a lower one for tenants without a pet.

There are some organisations offering ‘Deposit Free Renting Schemes’, this is something that we may investigate at a later date but at the moment these schemes are very new and have not been established for long enough to know if they are working well.

Holding Deposits: The holding deposit is the payment made by a tenant to a Landlord or Agent to reserve the property. This has now been capped at the equivalent of 1 weeks rent.  From taking the Holding Deposit, the tenancy agreement must be entered into before the Deadline for Agreement. The Landlord or Agent who received the Holding Deposit can keep it if:-

  • The tenant fails a Right to Rent check
  • The tenant provides false or misleading information to the Landlord or Agent, which the Landlord is reasonably entitled to consider in deciding whether to grant the tenancy because this materially affects their suitability to rent the property.
  • The tenant notifies the landlord or agent before the deadline for agreement that they have decided not to enter into a tenancy agreement.
  • The tenant fails to take all reasonable steps to enter into a tenancy agreement.