From 1 June 2019, the Tenant Fees Act came into force in England, in short, stopping 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 keep to the new regulations.
Here at Cavendish Rentals, we can advise you on the Act, but we have briefly summarised what you can & cannot do below…
So what can you, as a landlord, charge your tenants?
- A refundable holding deposit (up to one week’s rent per property)
- Tenancy deposit (exclusions apply, ask us for more information)
- Changes to the tenancy (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
- 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 percent above the base rate
- replacing locks/security fobs. ALL claims must be supported by evidence from the landlord of costs and be reasonable
And, more importantly, what you cannot charge, under the Act?
Any fees not listed on the government’s ‘permitted’ fees list are prohibited (link below).
- Referencing
- Property viewing
- Administration charges
- Guarantors (this can be a condition of the tenancy but not for meeting this condition)
- Inventory checks (check in and check out)
- Right to Rent checks (you, 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)
Need more guidance on the Tenant Fees Act 2019?
Changing regulation and the introduction of new Acts, such as the Tenant Fees Act, can be confusing but as with all new legislation, it is imperative to get it right from the start. Please contact Cavendish Rentals to help you navigate through the ins & outs of the Act.
You can read the Government’s comprehensive guide here
https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance
Wales also Bans tenant fees
The Welsh legislation mirrors that in England in some ways, but in others it is distinctly different.
There are key differences:
- No provision for optional payments. The legislation provides no explicit provision allowing for payments to be demanded as long as they are optional and there is a permitted payment offered alongside the charge.
- A different enforcement mechanism. The enforcement mechanism in Wales is totally different. Unlike in England where the system starts with a financial penalty and only if there is a second breach within 5 years is an offence committed. In Wales, every breach of the legislation is an offence and is prosecutable in the magistrates’ court immediately.
- Guidance. Like in England there is guidance which will be produced. However, unlike in England, in Wales authorities are required to have regard to that guidance and to comply with its main requirements. Precisely what it will ask of them is yet to be established.
- Deposits. Unlike in England the appropriate level of tenancy deposit is not fixed in the legislation and is to be decided later by regulations
- Prescribed information. Unlike in England, it is possible for the Welsh government to require that when taking a holding deposit, which is set at the same one week’s rent as in England, the tenant is given some prescribed information.
- Other differences. Welsh legislation does not say anything about contractual damages, which do not really need to be approved anyway as they are court awarded for breaches of contract, and simply states that default fees are permitted. However, they are subject to further limits both in terms of the permitted amount and in terms of the things that default fees can be charged for.
Read the official guidance here https://gov.wales/sites/default/files/publications/2019-08/letting-fees-guidance-for-landlords-and-letting-agents.pdf
