Tenant Fees are Officially Banned

Posted on Monday, June 17, 2019

The tenant fee ban came into effect from the beginning of June, and we won’t lie, we let those fees go a LONG while ago, in fact, almost a whole year before the deadline. So, you know you aren’t getting any tenant fees with Abode, but what does that actually mean and how have the new rules changed things... for other agents that is! We explore the new regulations in our latest blog.

The basics

The Tenant Fees Act has banned most letting fees and caps tenancy agreements signed on or after 1 June 2019.

The ban applies to all assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing in the private rented sector in England. Although most tenancies in the private rented sector are assured shorthold tenancies, if you’re not sure what kind of tenancy you have, Shelter has a tenancy rights checker that should help you to figure this out.

Why bring the ban in?

To us, this is obvious – to save you money. It’s more than that though, it also allows you to see the costs in the advertised rent with no hidden surprises. It’s always good to know how much you are actually going to pay when you sign on the dotted line!

So, what does most fees mean?

Well now, the only payments landlords or letting agents can charge for new tenant contracts are:

  • the rent itself
  • a refundable tenancy deposit (capped at five weeks’ rent where the total annual rent is less than £50,000 or 6 weeks’ rent where the total annual rent is £50,000 or above)
  • a refundable holding deposit to reserve the property/room (no more than one weeks’ rent)
  • 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 giving access to the housing, where required under a tenancy agreement.

This means that no longer can an agent charge £100 to put your email on a piece of paper or to print you a simple copy of your agreement – but we never did that anyway!

Well, if tenants aren’t paying for the service who is?

Officially, the UK Government website says:

“The party that contracts the service – the landlord – will be responsible for paying for that service, helping ensure the fees charged reflect the real economic value of the services provided and sharpen letting agents’ incentive to compete for landlords’ business.” All you need to know is that when renting with Abode, the cost of your tenancy will be as it has always been, simple and easy to understand. This also goes for landlord and property management fees. Honesty is always the best policy!

What if I’ve entered into a tenancy, but I’ve already paid fees?

The short answer is the deadline is officially later. If a landlord or agent requires you to make a payment under a term within a tenancy, which was entered into before the ban came into force, such as check-out or renewal fees, they can continue charging those fees until 31 May 2020.

What should I do if I think I’m being charged when I shouldn’t be?

If the payment a landlord or agent is charging is not listed above, it is not lawful, and a landlord or agent should not ask you to pay it. If a landlord or agent has charged a prohibited payment, check the list of permitted payments on the UK Government website – we link you to it below (page 10 is the one you need!)

Extra info

If you’re being evicted and a landlord hasn’t given you back any fees they owe you, the good part is they legally have to. A landlord cannot evict you using the section 21 eviction procedure until they have repaid any unlawfully charged fees or returned an unlawfully retained holding deposit. (All other rules around the application of the section 21 evictions procedure will continue to apply.)

If you need any further information about the legal side, or your worried a different agent is charging you for something you shouldn’t be being billed for under the new guidance, take a look at the Tenant Fees Act 2019.

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