At Andrew Lees, we are keen to ensure landlords in and around the local remain in touch with regulations. While the Tenant Fees Ban was introduced last year, it has recently been extended, and we are keen for local landlords to ensure they know what they need to do.
The Tenant Fees Ban was introduced on 1st June 2019, but now, one year later on, it applies to existing tenancies and new tenancies. Landlords and rental properties which were unaffected in the first year should now review the Act to ensure they comply with regulations.
David Cox, the Chief Executive at ARLA Propertymark, said; “I think some agents will need a nudge to remind them that, in particular, they must examine their records to ensure they have not charged any advance check-out fees or any other advance fees in the past however long ago the money was taken. Agents have to remember that any fees taken in advance previously – and entirely lawfully at the time – have now become prohibited payments this morning, and have to be returned.”
What can landlords and agents no longer charge for?
-
Property viewings
-
Reference checks
-
Credit checks
-
Insurance policies
-
Guarantor requests
-
Fees to cover administrative work
-
Gardening services
What is the penalty for landlords who breach the laws?
A breach of the Tenant Fees ban can result in a penalty of up to £5,000. If a landlord breaches the ban regularly, they can receive an unlimited fan and face criminal charges.
Steve Harriott is the Chief Executive of the Tenancy Deposit Scheme (TDS), and he said: “Today is an important date in the calendar for landlords and letting agents in England, as it means that the Tenant Fees Act is fully in force and the transitional period has ended. The implication for TDS is that we should no longer see deposit disputes where landlords or letting agents seek to make claims for things like unpaid check-in or check-out fees.”
What can landlords and letting agents still charge for?
-
Holding deposits
-
Deposits
-
A fee when there is a change in tenancy agreement
-
Fees associated with the early termination of the tenancy
-
Utility bills
-
TV licence payments
-
Council tax
-
Interest fees for late rental payments
-
Fees covering reasonable costs when replacing keys or security devices
Neli Borisova is a solicitor in the commercial litigation team at law firm JMW, and she said; “The Act is not very well-worded and the guidance issued by the MHCLG is unclear in several areas. For example, it is illogical to prohibit landlords and tenants reasonably pre-agreeing the cost of an end of tenancy clean, which gives tenants a clear understanding of their liabilities. The need to justify cleaning costs in each case potentially creates a further point for dispute between landlords and tenants.”
Neli continued by saying; “The widening of the Act will inevitably add pressure to landlords and letting agents who are already facing significant financial challenge due to coronavirus. Businesses are having to adapt at speed on many fronts. It is also unlikely that the changes required by the Act are on landlords’ and agents’ radars at the moment.”
Which fees have been capped?
-
If a tenant leaves the rental property early, the cap stands at the amount of rent which would have been due until the end of the tenancy
-
With respect to holding fees, the cap is now at one week’s rent, and this sum must be refunded (or put towards a rental payment or tenancy deposit) when the agreement has been signed
-
Contract changes have been capped at £50
-
Late payments have been capped at 3% above the Bank of England base rate for every day the payment is late, assuming late payment charges are contained within the contract
-
The deposit has been capped at five week’s worth of rent when the annual rent is up to £50,000; and capped at six weeks’ worth of rent when the annual rent is higher
As an experienced letting agent serving the Bridgwater community, and many of the surrounding areas, we are here to help. We promise to stay in touch with the latest technology, helping our clients to achieve more, and we aim to support the local community as best we can. If there is anything, we can assist you with; please contact Andrew Lees Lettings today.