What landlords and tenants need to know about the Tenant Fees Act 2019

The Tenant Fees Act 2019 came into effect on 1 June 2019 and it has had an immense impact on residential landlords in the UK as it limits the type of fees and deposits landlords can charge.

The act also affects letting agents and has been designed to ensure that tenants have more information about their rights and obligations when it comes to renting a property.

The Tenant Fees Act 2019 has been welcomed by many as a way of protecting tenants from excessive fees and deposits, but it has also been met with some criticism by landlords who are concerned about their lack of protection. In this article, we will take a detailed look at the Tenant Fees Act 2019 and discuss how it impacts landlords in the UK. 

Overview of the Tenant Fees Act 2019

The Tenant Fees Act 2019, otherwise known as the Tenant Fees Bill, was introduced by the Government to tackle the issue of tenant fees in the private rented sector. The act limits the amount that landlords and letting agents can charge tenants for deposits, fees and other charges, and also sets out a framework for when and how these fees can be charged.

The aim of the act is to make renting a property more affordable and to protect tenants from excessive fees.

The Tenant Fees Act 2019 covers England only, and applies to all assured shorthold tenancies, student tenancies and licences to occupy a property, which are the most common types of tenancies. It does not apply to leases or tenancies that are longer than seven years. It also does not apply to properties that are let by local authorities or housing associations.

Key Parts of the Tenant Fees Act 2019

The Tenant Fees Act 2019 is a complex piece of legislation and it contains a number of important provisions which landlords must be aware of. Below, we have outlined some of the key parts of the act which have the greatest impact on landlords:

1. Tenant Fees

The Tenant Fees Act 2019 limits the type of fees which landlords and letting agents can charge tenants. It also sets out a framework for when and how these fees can be charged.

The only fees which can be charged are:

• Rent

• A refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above

• A refundable holding deposit (to reserve a property) capped at no more than one week’s rent

• Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher

• Payments associated with early termination of the tenancy, when requested by the tenant

• Payments in respect of utilities, communication services, TV licence and council tax

• A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement

2. Prohibited Payments

The Tenant Fees Act 2019 also sets out a list of prohibited payments which landlords and agents cannot charge tenants.

These include:

• Upfront fees or deposits which are not refundable

• Fees for renewing a tenancy

• Fees for granting a tenancy

• Fees for viewings

• Fees for referencing or credit checks

• Fees for inventory checks

3. Enforcement

The Tenant Fees Act 2019 sets out a framework for enforcing the act and ensuring that landlords and agents comply with the legislation. Local Trading Standards Officers are responsible for enforcing the act and they have the power to issue fines of up to £5000 if landlords or agents are found to be in breach of the law.

4. Dispute Resolution

The act also sets out a framework for resolving disputes between landlords and tenants. If a tenant believes that they have been charged a prohibited fee, they can make a complaint to the property’s local authority or Trading Standards Officers, who have the power to investigate the complaint and take action if necessary.

Impact of the Tenant Fees Act 2019

The Tenant Fees Act 2019 has had a significant impact on the private rented sector in the UK and it has been welcomed by many as a way of protecting tenants from excessive fees. However, it has also been met with some criticism by landlords who are concerned about their lack of protection.

The act has made it more difficult for landlords to recoup their costs and it has also had an impact on their ability to protect their property.

Landlords are no longer able to charge fees for referencing or credit checks, and they must now take out insurance to cover any losses they incur.

The act has also had an impact on the way in which landlords can charge deposits and set rents. Landlords are now limited to charging a maximum of five weeks’ rent for a deposit, and they must ensure that their rents are in line with market rents. The act has also had an impact on the way in which landlords can increase rents, as they must now give tenants at least three months’ notice of any rent increases.

 UK Cases based on the Tenant Fees Act 2019

Since the Tenant Fees Act 2019 came into effect, there have been a number of reported cases involving landlords and agents who have been found to be in breach of the law. In February 2020, a landlord in London was fined £5000 after he was found to be in breach of the act. The landlord had charged his tenants a tenancy set-up fee which was in excess of the amount permitted under the act.

In April 2020, a letting agent in Liverpool was fined £3000 for failing to provide tenants with information about their rights under the act. The agent had failed to provide tenants with a copy of the prescribed information, which is required under the act.

The Tenant Fees Act 2019 has had a significant impact on residential landlords in the UK and it has been designed to ensure that tenants have more information about their rights and obligations when it comes to renting a property. The act has also had an impact on landlords’ ability to protect their property and to recoup their costs, as they are now limited to charging a maximum of five weeks’ rent for a deposit.

The act has been welcomed by many as a way of protecting tenants from excessive fees and deposits, but it has also been met with some criticism by landlords who are concerned about their lack of protection. 

You can read the full guidance and details published under Crown Copyright below.

Download the Tenant Fees Act 2019: Guidance for tenants