Tenant Fees Act 2019
From the 1st June 2019 any fees not expressly permitted by the Tenant Fees Act 2019 will be banned. This is a sweeping change which landlords and agents must make themselves aware of quickly. It is intended to apply to all tenancies whether room only or for entire properties, student lettings and even lodgers. Company Lets and non-assured tenancies are not included in this ban but they make up a small minority of cases.
Any fees a landlord or agent changes will be in breach of the law and make them liable.
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This legislation came into force on the 1st June 2019 and applies to all new tenancies and renewals of old tenancies. From June 2020 (after the transitional period) it will even apply to old tenancies.
What fees are banned?
The clearest answer is any fee that is not expressly permitted is banned. The permitted fees include:
- Holding deposits (but limited to 5 week’s rent),
- Breach of Contract – whereby the landlord seeks restitution for damages and seeks to put him or herself in the position they would have been in but for the breach. However, they may not apply a blanket fixed fee for damages. Such damages must reflect the actual losses.
- Changes to the Tenancy - Landlords may charge up to £50 for changes to a tenancy. More may be charged where it can be shown that it is reasonable. Further charges may be applied where there is an early surrender of the tenancy but the charge must mirror the actual loss. There can again, be no fixed fees for this. But there is a presumption that £50 is adequate.
Please refer to the Act itself for further details on these items and the restrictions and caps that apply.
This means that the vast majority of fees which tenants have historically paid are no longer permitted and if a landlord or agent breaches this law they may be fined up to £5000 as a result plus the tenant may claim compensation through a tribunal.
The typical things which are therefore banned include but are not limited to:
- Tenant Credit checks
- Tenant Referencing
- Professional cleaning
- Administration charges
- Gardening services
- Guarantor forms
This will come as a pleasant surprise to tenants and perhaps a shock to many agents as the items above have been a core part of the income stream for many.
Section 21 and the Tenant Fees Act 2019
If a landlord or agent charges a banned fee then a Section 21 Notice cannot be given and could delay or prevent eviction entirely.