On the 1st June both Private Landlords and Agents can no longer charge fees to Tenants.

The tenant fee ban is new legislation. Predictions are that this may save a whopping 240 Million per year in Tenants fees, including properties that are HMO’s.

The Ban will be effective from the 1st June 2019 and we can no longer charge fees for the following:

  1. Referencing
  2. Credit checks
  3. Check in / Check out and inventories
  4. Deposit registration
  5. Administration and paperwork relating to tenancies.

The Landlord won’t be able to enforce any additional product or services in order to attempt to recoup these costs (Unless they are listed in the legislation) AND listed in the contract such as:

Utilities and the tenant fee ban

Payment to a Billing Authority such as Council Tax  or TV Licence or for communications are permitted.
The Landlord will not be able to charge inflated 1st month rent to cover any lost fees.

Rents and deposits

These wont be effected and can be paid as normal, deposits will be capped at 5 weeks rent – OR if the annual rent is 50k or more then deposit can be 6 weeks rent.

Holding deposits

These are permitted and limited to maximum of 1 weeks rent. The person taking the holding deposit MUST repay it within 7 days of the Landlord and Tenant entering into the agreement, OR the Landlord deciding NOT to enter into the agreement.

Exceptions to the tenant fee ban

With the consent of the person paying the holding deposit, it may be used to pay towards the first months rent OR towards the tenancy deposit (which will need to be registered in the normal manner)

Holding deposits CAN be retained by the Landlord or Agent in the following circumstances

  1. Landlord is prohibited by Immigration to allow the tenant a tenancy
  2. Tenant decides not to enter into a tenancy agreement or fails to take steps to do so within the agreed time.
  3. If the tenant provides false or misleading information

Payments for defaults in the tenancy are also permitted under certain circumstances:- Eg –

Tenant loss of keys, or damage to any security system, only the cost of replacement can be claimed and the Landlord would require proof, any extra payment on top would be unlawful.  Late payment charges are permitted after 14 days from the due rent date capped at 3% per annum above B.O.E Rates.

Early termination

Early termination of contract fees CAN be charged to the value of the loss to the landlord in the following circumstances:-

  1. At the tenants request of early termination before the end of a fixed term.
  2. In the event of a tenant failing to give the correct contractual notice during a periodic tenancy. Change and variations to tenancies can be charged up to £50 if it is more than this, then the Landlord will need to demonstrate the value of the cost.

 

I would welcome your thoughts on how you think this will pan out?

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You can download the full legislation HERE 

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