The Tenant Fee Ban

The Tenant Fees Bill sets out the government’s approach to banning letting fees for tenants.

Ultimately there are no fees that can be charged to the tenant, nor can the tenant be forced to sign up to any third party providers.

The key measures of the bill include:

  • Security deposits must not exceed the equivalent of five weeks' rent.

  • Holding deposits will be capped at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant within 28 days

  • A fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution

  • Trading Standards will enforce the ban and will make provisions for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal

  • Landlords are prevented from recovering possession of their property via the section 21 until they have repaid any unlawfully charged fees

  • Enabling the appointment of a lead enforcement authority in the lettings sector

  • The Consumer Rights Act 2015 will be amended to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla

  • Local authorities will be able to ring-fence any money raised for future local housing enforcement

Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:

  • A change or early termination of a tenancy when requested by the tenant

  • Utilities, communication services and Council Tax

  • Payments arising from a default by the tenant such as replacing lost keys.

What does this mean to me?

Ultimately as landlords you are unable to charge extra security deposits for the likes of pets or poor credit histories.

Landlords also will need to be aware that due to there being less deposit held ultimately there will be less monies available for reparations or arrears.

As such we would recommend considering investing in some type of rent guarantee insurance or legal cover.

Orchards offer additional legal cover for £10 per month. Call for more details 01525 40 22 66