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What is the Tenant Fee Ban and How does it Affect Tenants and Landlords?

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– 01 May 2019 –

What is the Tenant Fee Ban?

The laws are part of a wider shake-up in the private rental sector in England and the ban on tenant fees applies to new or renewed tenancy agreements signed on or after 1 June 2019. It affects all assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing in the private rented sector in England.

What does it mean for the tenants?

The Government has introduced the Tenant Fee Act to ensure more transparency in the private renting sector by reducing hidden costs and giving tenants in England more rights over agreements for their homes. They will no longer be required to pay fees for certain services such as viewings, credit checks, references and setting up a tenancy.

What does it mean for the landlords?

Landlords will now be accountable for the costs related with setting up, renewing or ending a tenancy, such as referencing, administration, inventory, and renewal and check-out fees. Any fees that have been charged to a tenant before 1 June 2019 will not have to be paid back by the agents and landlords.

What are the penalties for non-compliance?

If the fee you are charging is not on the list below, it will be deemed a prohibited payment outlawed under the ban. If a prohibited payment is charged or received, it could see the offending landlords and/or agent facing a fine of £5000, which could increase to £30000 for repeat offenders or even result in a criminal offence.

The only payments tenants can be charged now in connection with a tenancy are:

  • Rent
  • Tenancy deposits– The amount of the refundable tenancy deposit is now capped and depends on the total annual rent of the property. It should be no more than five weeks’ rent where the annual rent is less than £50000, or six weeks’ rent where the total annual rent is £50000 or more.
  • The Holding Deposit-Used to take a property off the market is now capped at one week’s rent and the fee will have to be repaid once the tenant has signed the agreement or 15 days, if the agreement doesn’t go ahead.
  • Payments to change the tenancy when requested by the tenant– For example, what day the rent is paid is now capped at £50, or reasonable costs incurred if higher.
  • Early termination payment– If the tenant decides to leave before the fixed term of the tenancy has ended. The tenant will be charged a fee capped at no more than the amount of rent that would have paid until the end of its tenancy.
  • A default fee– For late payment of rent and replacement of a lost key or security device, where required under a tenancy agreement.
  • Payments for utilities, communication services, TV licence and council tax.

If you require more information about the tenant fees ban and how this will affect you, please contact Excel Property Services by phoning us on 020 7691 9000 or email to info@excel-property.co.uk

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