The law around what tenants can be charged for when starting new tenancies is changing this Saturday (1st June).
But what does that mean for renters ?
The Tenant Fees Act will apply to new tenancies and renewals of tenancies, meaning that landlords and letting agents won’t be able to charge for a range of admin fees that they previously had, and has capped tenancy deposits to five weeks.
This new legislation means that some tenants could save hundreds of pounds.
For properties in England, the Tenant Fees Act 2019 means that in addition to rent, lettings agents can only charge tenants (or anyone acting on the tenant’s behalf) the following permitted payments:
- Holding deposits (a maximum of 1 week’s rent)
- Deposits (a maximum deposit of 5 weeks’ rent for annual rent below £50,000, or 6 weeks’ rent for annual rental of £50,000 and above)
- Payments to change a tenancy agreement eg. change of sharer (capped at £50 or, if lower, any reasonable costs)
- Payments associated with early termination of a tenancy (capped at the landlord’s loss or the agent’s reasonably incurred costs)
- Utilities, communication services (eg. telephone, broadband), TV licence and council tax
- Interest payments for the late payment of rent (up to 3% above Bank of England’s annual percentage rate)
- Reasonable costs for replacement of lost keys or other security devices
- Contractual damages in the event of the tenant’s default of a tenancy agreement and
- Any other permitted payments under the Tenant Fees Act 2019
The Act also states that agents and landlords don’t have to pay back any fees they have charged a tenant before 1st June 2019. So, if an agent or landlord requires a tenant to pay a fee linked to a contract that started before the ban came into force, such as check-out or renewal fees, they can continue charging those fees until 31st May 2020.
This new Act should spell some good news for tenants and it may also meand that more people are able to move more often if they want to, thanks to the reduction in the cost of moving.
Miles Shipside from Rightmove commented :
“It remains to be seen if the ban will be passed on in other ways such as increasing rents and tenants will still need to find a pretty hefty rental deposit in many areas. What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing.”
For properties in Wales, changes to tenant fees will come in from September 2019.