Tenant Fees Act 2019: What you need to know

Actualizado el Friday, 24 January, 2020

Hidden fees and extortionate deposits can turn what seems like an affordable rental into a pricey deal. With the overall cost being raised with these additional fees, it’s hard to know how much renting will really cost you. Luckily for future and current tenants, the government has introduced a ban on unnecessary fees, a move that is estimated to save tenants around £240 million a year. Introduced from 1st June 2019, here’s everything tenants need to know about the new letting fees ban.

What can landlords charge tenants after the letting fees ban?

  • Rent, which should be agreed before the contract is signed.
  • A deposit, but this now can’t exceed the total amount of six weeks’ worth of rent.
  • A fee if the tenant wants to end the tenancy early.
  • Payments required when there is a default from the tenant, such as if they don’t pay their rent.
  • Holding deposits but these will be capped and no more than one week’s rent can be charged.
  • Changes to the tenancy agreement, as requested by the tenant.

What can’t landlords charge tenants after the letting fees ban?

  • Overcharging tenants for extra services, such as reinstalling smoke alarms.
  • Admin work, including inventories and contract renewals.
  • Overcharging on deposits, holding or otherwise.
  • Credit checks, which often cost very little for the landlord or agency to do.

According to a report from Letting Fees, a two-person household can expect to pay £386 on top of their deposit and rent before moving in. The study also found that many of these costs are hidden on their website or were listed in a non-compliant way, such as not including VAT. Cutting these costs can save tenants a significant amount of money.

What happens if your landlord breaks the ban?

If you believe your landlord is breaking the ban, you should remind them of your rights. If they continue to ignore the act, you should report them to your local council.

The punishment for breaching the letting fees ban is a fine of £5,000. If the same offence is committed again within 5 years, there will be an unlimited fine.

What else will change after the letting fees ban?

  • There will be new requirements about the way a holding deposit is returned by the landlord.
  • The cost of making changes to the tenancy agreement is capped at £50 unless the landlord can prove it came at a greater cost.
  • Payments requested by the landlord must be reasonable and made in writing.

When will the ban come into place?

It’s believed that the letting fees ban will come into action on the 1st June 2019. Any agreements signed on or after this date will have to follow the above guidelines when it comes to additional charges or fees. At the time of writing, the Tenant Fees Bill has worked its way through the House of Commons and House of Lords, although it’s subject to amendments as it’s in its third reading. From there, the bill will go back to the House of Commons where the amendments will be assessed by MPs. Finally, it will be granted royal assent before being put into action.

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