It’s the Law – Tenant Fees are no more!16th February 2019
The Tenant Fees Ban is now law, with Royal Assent on the legislation being formally granted this week. The announcement was made after a long and drawn-out process.
From 1st June 2019 the Tenant Fees Bill will require landlords and letting agents to stop charging fees to tenants for setting up or renewing their tenancy. The ban excludes statutory and contractual periodic tenancies but will apply to all pre-existing tenancies from 1st June 2020.
Services that it will no longer be legal to charge for include:
Landlords and agents can still charge holding deposits, security deposits and rent, though the Bill caps security deposits at five weeks’ worth of rent (if the annual rent is under £50,000) and holding deposits to one week’s rent.
Certain fees that are not banned can still be charged e.g. for a change of tenant, fees to compensate early surrender of a tenancy, loss of keys and late payment. Anything over £50 will require evidence of actual costs.
Landlords will still be protected by contractual clauses that require tenants to pay fees for the television licence, council tax and utilities, if these are paid by the landlord. However, it is prohibited for landlords to charge tenants any more than the actual billed costs for these services. If a landlord does charge a banned fee after 1st June 2019, a refund must be paid to the tenant within 28 days, or they will face a fine of up to £5,000. If landlords persist in charging these banned fees, it will become a criminal offence and can carry a fine of up to £30,000 and a banning order.
Kim McDonald Partner at Gilbert Stephens says, “It is vitally important that landlords and agents check that their tenancy agreements and all clauses are compliant and will remain valid after 1st June 2019. The penalty for not doing so could be severe, and with just over 3 months to check your documents, it is wise to seek advice sooner rather than later. If you are a landlord and your properties are managed by an agent, make sure for yourself that your agent has put everything in place, as you may also be liable for any fines if everything is not up to standard.”