Are you aware of the Tenant Fee Ban and when it comes into effect?

From 1^st June 2019, significant changes are being made to the property industry and in particular the rental sector. These Government changes in legislation are incredibly important and will affect both landlords and tenants alike.  The general media coverage for such huge changes has been limited at best, especially when you bear in mind that this new legislation affects almost every tenancy in England. It matters not whether you are an individual landlord or you have your property looked after by an agent or a third party the new laws will apply.

The penalties for breaking these new laws are also significant. For example, the penalty for a first offence is anything up to £5000, a scary thought for any landlord or agent and another reason why this subject warranted substantially more media exposure.

We at Latham Smith are ARLA Propertymark licensed agents, which means that not only do we comply to all legislation but that we are also recognised lettings experts  and are able to guide you through the many pitfalls of such an ever changing industry. Lets’ try and make things a little clearer….

What does the tenant fee ban mean?

Well, most importantly it needs to made clear that the days of tenants paying for the cost of their own referencing, their share of a tenancy agreements, inventory check outs to name but a few have now gone. The new legislation states that no fee other than the ‘permitted payments’ outlined by the Government can be charged to a tenant by a landlord/agent.

What are these Permitted payments?

• The Rent
• A capped refundable Holding deposit (one week’s rent)
• A capped refundable Tenancy deposit (five week’s rent if annual rent is £50,000 or below and six week’s rent if annual rent is above £50,000)
• Payments in the event of a default
• Payment on variation, assignment or novation of a tenancy
• Payment on termination (surrender) of a tenancy
• Payments in respect of council tax
• Payments for utilities (electricity, gas or other fuel, water or sewage
• Payments for a television licence
• Communication services (telephone other than a mobile telephone; the internet; cable television; satellite television)
• Green deal charge

NB. The secretary of State can amend the list of Permitted Payments but cannot remove rent from the categories of payments which are permitted.

The Act refers to a tenant or a ‘relevant person’ which includes a prospective, current or a former tenant or licensee.  Please note this also includes a Guarantor or anybody acting on behalf of the tenant.

To reconfirm, the ban on tenant fees applies only in relation to Assured Shorthold tenancies and licences signed on or after the 1^st June 2019.

Please call us on 01923 447192 or 447195 to discuss any questions you have regarding this new legislation.