The Tenant Fees Act 2019 came into force on 1st June 2019.
Its provisions apply with immediate effect to all tenancies created on or after the 1st June 2019 (assured and assured shorthold tenancies including student lettings) and will apply to all other existing assured and assured shorthold tenancies from the 1st June 2020. The prohibitions apply to arrangements with a tenant, the tenant’s guarantor and a person acting on behalf of the tenant
The Act permits a landlord only to charge the tenant for the following under the terms of an assured/assured shorthold tenancy:
- A tenancy deposit which is capped to 5 weeks’ rent if the annual rent is £50,000 per annum or less and up to 6 weeks’ rent of the annual rent exceeds £50,000.
- Holding deposit (capped at 1 week’s rent) to reserve a property before the grant of a tenancy;
- Event of a default. Payments for loss of keys or other security devices or failure to pay rent on time or other breach of the tenancy. For failure to pay on time, the sums recoverable are limited to interest on the late payment of rent and the rent has to have been outstanding for 14 days or more for the interest to become due;
- Payment for the variation, assignment or novation of the tenancy (but this is capped at £50 or reasonable costs);
- Payment on early termination of the tenancy (eg surrender fee);
- Council tax (and other utilities);
- TV licence;
Landlords and letting agents cannot require tenants to make any payment that is not a permitted payment. Prohibited payments include:
- Tenancy set up fees;
- Viewing fees;
- Credit check fees;
- Inventory check fees;
- Check out fees;
- Fees for professional cleaning services.
Trading Standards is the enforcement authority for the prohibitions applying to landlords and letting agents and repayment obligations in relation to holding deposits. An enforcement authority can impose a financial penalty and require a landlord or letting agent to repay the tenant or relevant person any outstanding prohibited payment or holding deposit plus interest. The Act also makes provision for the tenant or relevant person to recover unlawfully charged fees from the First-tier Tribunal.
It is important to note that a section 21 notice cannot be given to recover possession of the property until the landlord has repaid any unlawfully charged fees or unlawfully retained holding deposit.
If you are unsure or require further advice on these changes and how they can affect you please contact Anton Bilinski who is able to guide you through these changes and act for you when a landlord or tenant dispute arises.