If I Were (Not) A Rich Man – The Tenant Fees Act 2019

Our team:

“You’ve got to pick a pocket or two….” from the renowned musical “Oliver” resembles how some landlords used to overcharge tenants on in order to create some extra cash for themselves. The new Tenant Fees Act is in force in England as of 1 June 2019, capping the amount renters can be charged for their deposits and banning letting fees altogether as part of the Government’s bid to reduce hidden costs for tenants to save tenants across England at least £240m a year.

The Act is designed to reduce the charges that tenants face from the very start of the renting process, throughout their tenancy, and when their contract comes to an end, by getting rid of any hidden costs.

Landlords will only be able to recover “reasonably incurred costs” and will have to provide evidence of what these costs are before charging their tenants. The changes will help put an end to the practice by some landlords of overcharging renters for minor damages or presenting them with an exaggerated bill to replace an item.

The main introductions are:

  • Default fees will be limited to charges for replacement keys or a respective security device, and late rent payments only.
  • Deposits will be capped at no more than one week’s rent, applying to a maximum of one property only.
  • Security deposits will be capped at five weeks rent.
  • The Consumer Rights Act 2015 will be amended to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
  • Local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement.

Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:

  • A change or early termination of a tenancy when requested by the tenant.
  • Utilities, communication services and Council Tax.
  • Payments arising from a default by the tenant such as replacing lost key.

The amount of time it takes for landlords and agents to pay back any fees they have charged unlawfully will also be reduced to ensure renters get their money back quickly. Landlords will also not be able to remove tenants from a property using the Section 21 eviction procedure until they have paid back any fees or a holding deposit that were unlawfully charged.

Any landlords or agents who ignore the ban will now face a civil offence fine of £5,000, which could increase to £30,000 for repeat offenders or result in a criminal offence.

If you require any further advice or information on this topic. Fladgate’s residential property team would be delighted to assist.

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