From 1 June 2019, the Tenant Fees Act comes into force, prohibiting landlords and agents from charging any fees to tenants, other than those ‘permitted’ by the Act. Any tenancy that is signed on or after 1 June must adhere to the new regulations.
The Tenant Fees Act applies to assured shorthold tenancies, student accommodation tenancies and licences to occupy housing in the private rented sector.
The act only applies to landlords, agents and tenants in England.
Letting fees are already banned in Scotland and, while they are currently still legal in Wales and Northern Ireland, a ban was put before the Welsh government in June 2018 and is intended to commence this September.
There are a number of fees that are ‘permitted’. These include:
- A refundable holding deposit (up to one week’s rent per property)
- Tenancy deposit (exclusions apply, see below for more information)
- Changes to the tenancy (for example, introduction of a pet, permission to run a business from the property or other amends that change the contractual responsibilities. This is capped at £50 per change unless the landlord is able to prove that the resulting cost was higher AND is reasonable)
- Utilities (electric, gas, water)
- Council tax, TV licence fees, communication fees (e.g. telephone, broadband etc.)
- Fee for early termination of tenancy/surrender fee – the landlord must be able to show reasonable loss has been suffered, for example as a result of referencing, re-advertising and can charge rent until the next tenant moves in
- Default fees which should be written into the tenancy agreement for:
- late payment of rent – this can only be after 14 days have passed and interest at a maximum of 3 per cent above base rate
- replacing locks/security fobs. The Guidance states, for example, that a new standard door key could be valued between £3-£10, a specialist door key between £5-£20 or a replacement key fob up to £50; there may be circumstances where it is necessary to pay more and ALL claims must be supported by evidence from the landlord of costs and be reasonable
What fees are prohibited under the act?
Any fees not listed on the government’s ‘permitted’ fees list are prohibited. Landlords and agents are NOT able to charge fees for:
- Property viewing
- Administration charges
- Guarantors (this can be a condition of the tenancy but you cannot charge fees for meeting this condition)
- Inventory checks (both check in and check out)
- Right to Rent checks (the landlord or agent are liable for this cost, unless the tenant fails the check)
- Pet fees/deposits
- Renewal/exit fees
- Interest on permitted payments
- Professional end of tenancy cleaning – as a special clause (breach of contract ONLY)
- Third party fees (unless the tenant chooses to undertake the services themselves)
- Gardening services (unless included within the rent)
For a full list of permitted and prohibited fees please visit the GOV.UK website for guidance.