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Tenant Fees

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We’ve known the tenant fees ban has been coming for a long time, agencies across England must now ensure that they are putting plans into action and taking all steps necessary to prepare.

Now that we have legislative certainty and know that the legislation will come into force on 1 June, the Government will prepare to publish more detailed guidance and that will give agents a better understanding as to how the ban should be practically implemented.


The Ban on Letting Agent Fees - England

Timeline of events:

12 February 2019
The Tenant Fees Bill was given Royal Assent, passing into law as the Tenant Fees Act 2019.

15 January 2019
Parliamentary Under-Secretary of State in the Ministry of Housing, Communities and Local Government, Lord Bourne of Aberystwyth announced that the ban on tenant fees will apply to all contracts entered into on or after 1 June 2019.

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. 

 

Tenant Fees Act - Effective June 1st 2019

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
  • A charge for late rent payment (not exceeding 3% above the bank of England base rate)

Information sourced from Propertymark ARLA:   https://www.arla.co.uk/lobbying/letting-agent-fees.aspx


TENANT ADVICE:
If you are a Tenant and needing further information on the Tenant Fee Ban, please follow the below link:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791280/TFA_Guidance_for_Tenants.pdf

 

McField Residential Limited - Estate Agents - Sales & Lettings are members of Propertymark.  Details of our fees can be found on our 'Tenants' tab.

 

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