Confused about the tenant fee ban?

This weekend, on Saturday 1stJune, the tenant fee ban comes into effect across England for all new tenancies – although existing tenants will still have to pay any fees outlined in their tenant agreements until June 2020.

If you’ve not been able to keep up to date on the ins and outs, the fees that agents can now charge and the limits on them might be a little confusing. Here’s everything you need to know on the changes.

What, and who, does the ban apply to?

The ban covers Assured shorthold tenancies (ASTs), student accommodation, and licences (personal permission for someone to occupy a tenancy, such as a friend house sitting).

The only types of tenancy that are exempt from the ban are company lets (when a company becomes the tenant on a residential tenancy agreement, rather than an individual) and non-assured tenancies (such as tenancies where the tenant is renting a second home, or where the annual rent exceeds £100,000 and other high value properties).

Both landlords and agents have to abide by the fee ban, as well.

What should I be paying?

We outline in more detail some of the permitted fees on our fees page, but after 1stJune only the fees outlined below can be charged:

  • Rent
  • Tenancy deposit
  • Holding deposit
  • Default/missed rent charge
  • Deliberate or accidental damage
  • Replacement keys
  • Amendment charges (variation, assignment, or novation)
  • Termination of a tenancy (‘moving out early’ charges)
  • Utilities and services (Council tax, utilities, television licence, communication services such as landline and broadband)

Anything else isn’t allowed! If you find you’ve been charged for something that isn’t a permitted fee under the new regulations, the agent has 28 days to return the money whether you request it returned or not.

What do you mean existing tenants can be charged?

If you signed a contract for your tenancy before 1stJune, and fees were included in the terms, you are still required to pay them until 1stJune 2020. This includes check out, cleaning, and pet fees, and any fees associated with an exit clause.

If the landlord or agent accept a fee that is now banned after June 2020, they must return the payment within 28 days or be treated as having charged a prohibited payment.

What if I renew my contract after June?

If you renew your tenancy it counts as a completely new tenancy, not a continuation, and is subject to the new regulation. This includes rolling contracts as well.

Since tenancy deposits are capped at 5 weeks worth of rent, if you renew your tenancy before June 2020 and your initial deposit was more than this, the landlord or agent must return the excess to you within 28 days.

Business photo created by yanalya – www.freepik.com

What now?

If you’d like some more in depth information, please check out the source links below.

Whether you’re an existing tenant or looking to start a new tenancy with one of our offices we recommend talking to your agent about what these changes mean for you, and what you can expect going forward.

 

Sources:
Understanding the Tenant Fees Act 2019 – Landlords Guild
Tenant Fees Ban in England – Residential Landlords Assoc.
Everything you need to know about the ban on letting agents charging fees to tenants – Liverpool Echo
Tenant Fees Act 2019: Guidance for landlords and agents – UK Gov