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New: Tenant Fees Act 2019 extended

New: Tenant Fees Act 2019 extended

1 June 2020 - The Tenant Fees Act now applies to all existing Assured Shorthold Tenancies (ASTs) and most residential licences, regardless of when the tenancy began.

When the legislation was first introduced last June, designed to stop landlords and agents charging tenants unreasonable fees, it applied only to new tenancies and some renewals.

With the transition period now over, the rules affect all qualifying tenancies including tenancies for student accommodation, with all tenant fees banned unless deemed 'permitted payments'.

What fees are banned?

Landlords and letting agents in England are no longer able to charge for 'extras' including:

  • Property viewings;
  • Check in and check out fees;
  • References;
  • Administration;
  • Pets;
  • Right to Rent checks.

The amount landlords can charge for security or holding deposits is also limited under the legislation.

What fees are allowed?

Permitted payments under the Act include:

  • Rent;
  • Refundable tenancy deposits (capped at five weeks rent if the annual rent is less than £50,000 and six weeks rent if above);
  • Refundable holding deposits paid to reserve a property (limited to no more than one week's rent);
  • Payments capped at £50 (or reasonably incurred costs if higher) for the variation, assignment or novation of a tenancy;
  • Payments for things like utility bills and council tax;
  • Payments linked to the early termination of a tenancy when requested by the tenant.

Implications for landlords

Not only are there large financial penalties for non-compliance, other sanctions include banning orders and even criminal prosecution.

In addition, charging a prohibited fee will affect a landlord's ability to successfully serve a Section 21 notice for possession until the fee in question has been repaid in full.

For help and advice on this area of the law, and landlord and tenant disputes, please contact Wards Solicitors' James Murray: James.Murray@wards.uk.com