Comment and insight from our property experts.
Tenant Fees Act applies to all existing Private Sector Tenancies from 1 June 2020
- AuthorBukola Obadun-Craigs
It was certainly a welcomed step taken by Government to reopen the housing market on 13 May 2020. The Housing Secretary Robert Jenrick set out guidance for those wishing to move home safely in line with social distancing advice. It was reported that 450,000 buyers and renters have been unable to progress their plans to move since lockdown restrictions were implemented in March.
Understandably, private sector landlords and letting agents will want to kick start the process of repairing the financial impact Covid-19 has had on their businesses. That’s all well and good but remember, more haste less speed - do not get caught out!
From the 1 June 2020 all tenant payments will be banned unless the Tenant Fees Act specifically permits them.
The civil penalty for landlords (or agents) who charge illegal fees is a £5,000 fine in the first instance. If the offence is repeated within five years, the landlord (or agent) may be subject to criminal proceedings or a fine of £30,000.
Summary of the key points from the Tenant Fees Act 2019:
- Only rent, a tenancy deposit and a holding deposit can be charged to tenants. It is prohibited to charge check-in, inventory, and admin fees.
- Tenancy deposits are limited to five-weeks rent for annual rents under £50,000. For rental of £50,000 or more, tenancy deposits will be capped at six weeks rent.
- Holding deposits are limited to one-weeks rent. This must be returned to the tenant either by payment back or put towards the first rental payment, or tenancy deposit. There are a few circumstances where the landlord can keep the holding deposit. This is set out in Schedule 2 Section 6 of the Act. The holding deposit can only be kept for 15 days unless parties agree an extension in writing.
- Fees of up to £50 can be charged for contract amendments such as adding a new tenant or allowing a pet. More can be charged if the landlord is able to demonstrate how their costs exceed £50.
- Fees can be charged for rent that is over two-weeks late, but landlords cannot charge for rent reminder letters.
- Fees for lost keys or other security measures can be charged at a reasonable cost but evidence of cost must be provided by the landlord.
- Items 4 – 6 above must be included as terms in the tenancy agreement to be able to charge the tenant.
If you have any specific questions you wish to discuss, please contact Bukola Obadun-Craigs.