The Tenant Fees Act came into force on 1st June 2019. This will restrict landlords and letting agents to charging certain fees in connection with tenancies.
The only payments that can be charged from 1st June 2019 are:-
- rent;
- a refundable tenancy deposit;
- a refundable holding deposit;
- payments to amend a tenancy or those charges associated with early termination of a tenancy (when requested by a tenant);
- payments for certain utilities and services; and
- default fees for late payment of rent and replacement of lost keys.
Any breach of the legislation under the Act could be considered a civil offence, and could incur a financial penalty of up to £5,000. Any further breaches (within 5 five years of the original breach) could result in a criminal conviction, a banning order and an unlimited fine. Local authorities will have the right to prosecute but if they decide not to, they could still impose a financial penalty of up to £30,000.
Also part of the new legislation is the “tenancy deposit cap” which also came into force on 1st June 2019. This means that tenancy security deposits will now be capped at the equivalent of 5 weeks’ rent for assured shorthold tenancies with an annual rent of up to £50,000. For tenancies with annual rents of £50,000 or more, the security deposit will be capped at 6 weeks’ rent. The cap will apply to all new/renewed tenancies including shorthold/student tenancies.
The above changes will apply to all new tenancies agreed and signed after 1st June 2019 but not to tenancies that are agreed before that date even if they start afterwards, and any existing tenancies that are renewed on a fixed-term basis. It doesn’t affect any tenancies signed before 1st June 2019, although the change will apply to any future fixed-term renewals.
The government has issued detailed guidelines for landlords and letting agents, tenants and enforcement agencies and this can be found at www.gov.uk/government/publications/tenant-fees-act-2019-guidance).
For further information on The Tenant Fees Act, please contact Paul Makinson using the form below.
