The Tenant Fees Act 2019

You may not have heard but the Tenant Fee Bill has now been passed through Parliament and is set to change the UK lettings industry dramatically in the next few months. As a Landlord or Letting agent you will most definitely be affected. The timeline of events were as follows..

Timeline of events:

5 September 2018
The Tenant Fees Bill completed its passage through the House of Commons with minor amendments. The Bill was moved on to the legislative stages in the House of Lords the following day.

2 May 2018
The Tenant Fees Bill was introduced to Parliament by Housing Secretary, James Brokenshire MP. The Government also issued their official response to the HCLG Select Committee report on the draft Tenant Fees Bill.

1 November 2017 
The Government introduced a draft Tenant Fees Bill to Parliament to ban letting fees for tenants. The Government’s intention to do this was announced 21 June 2017 in the Queen’s Speech at the state opening of Parliament.

7 April 2017
The Government launched an eight-week consultation seeking views on the detail of how a ban should be introduced. The consultation closed 2 June and 4,724 responses were received from a range of individuals and representative bodies. The responses to the consultation have informed the Government’s approach and publishing the Bill in a draft will ensure that there is scrutiny of the Government’s proposals by parliamentarians and stakeholders before introducing legislation.

But what does it mean to landlords and letting agents…

Tenant Fees Act

The Tenant Fees Act sets out the government’s approach to banning letting fees for tenants. The key measures of the Act include:

• Security deposits must not exceed the equivalent of five weeks’ rent (unless the annual rent exceeds £50,000 in which case deposits are capped at six weeks’ rent).
• Holding deposits will be capped at no more than one week’s rent. The Act also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
• The amount that can be charged for a change to tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred
• 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 is amended to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
• Local authorities are 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
• Payment of damages where the tenant has breached terms in their tenancy agreement
• Payments arising from a default by the tenant where they have had to replace keys or a respective security device, or a charge for late rent payment (not exceeding 3% above the bank of England base rate)

If you would like any advice on the Tenant Fee Act please give us a call on 01952 701019 and we will be happy to show how you can keep the costs associated to a minimum and prepare for the impending Fee Ban.