TENANT FEE BAN IN ENGLAND

From 1 June 2019, landlords and agents are no longer able to charge a number of fees in England for new tenancies signed on or after that date. This includes tenancies which are being renewed.

Examples of banned fees are:

• Charging for a guarantor form
• Credit checks
• Inventories
• Cleaning services
• Referencing
• Professional cleaning
• Having the property de-flead as a condition of allowing pets in the property
• Admin charges
• Requirements to have specific insurance providers
• Gardening services

WHICH FEES MUST STILL BE PAID AND ARE NOT INCLUDED IN THE BAN

Tenants can still be charged fees for:

• Damage caused to the property by the tenant
• If the tenant loses their keys
• Late payment of rent
• A change to the tenancy requested by the tenant, with £50 being considered the norm in government guidance. Any charge above this would need to be backed up with written evidence.

The fees chargeable will be limited. For example in the case of lost keys, a landlord or agent will be able to charge for the cost of replacing the keys and reasonable costs. Charging costs for lost keys must be evidenced in writing, for example through receipts for the keys and petrol used etc. Landlords and agents cannot charge for their time or the inconvenience.

If a tenant wants to leave the contract early, they will be liable to pay the rent up to a maximum of the length of the fixed term of the contract.

RESTRICTIONS ON RENT

There will be a ban on setting rent at a higher level for the first portion of the tenancy and then dropping it down afterwards. This is to prevent landlords or agents trying to offset the ban on fees by artificially increasing the rent for the initial period to make up the costs.

HOLDING DEPOSITS

Holding deposits will be limited to a maximum of 1 week's rent and subject to statutory legislation on the repayment of this should the tenancy not go ahead. This is proposed to be:

• The landlord has 15 days to make a decision once a holding deposit is taken.
• If the tenancy does not go ahead then the money must be repaid in full within 7 days of the deadline being reached or the landlord backing out.
• Repayment does not need to be in full if the tenant backs out of the tenancy agreement themselves, fails right to rent checks, has provided false or misleading information, or where the landlord tries their best to get the information needed but the tenant fails to provide it within the 15 days.
• If the tenancy does go ahead, the holding deposit must be returned within 7 days of agreement, unless it is converted into part payment of the actual deposit or used towards the initial rent payment.

DEPOSITS

Deposits will be limited to 5 weeks rent as a maximum amount for tenancies where the annual rent is below £50,000.

Deposits for tenancies where the annual rent is £50,000 or more are limited to the equivalent of 6 weeks rent.

Source: Residential Landlords Association