Tenant Fees Act 2019

The Tenant Fees Act 2019 will come into force on the 1st June 2019. This Act aims to ban landlord and lettings agent fees paid by tenants in attempt to improve competition, fairness and affordability in the lettings sector. The Government has estimated that the Act will save tenants a total of £240 million a year in letting fees. £160 million is estimated to come from letting agents’ fees and £80 million will come from knock-on costs to landlords.

Who will the ban effect?

From the 1st June 2019 the ban will cover both licences to occupy and Assured Shorthold Tenancies. The ban on fees will initially apply to tenancy renewals, statutory periodic tenancies and new tenancies; although by June 2020 it will apply to all pre-existing tenancies. The ban will not be applied to long leaseholds, holiday lets or tenancies of social housing.

What fees will be allowed?

Following the implementation of the Act, the only fees which Landlords and Agents will be able to charge Tenants will be –

  • A refundable tenancy deposit (which cannot be more than five weeks rent).
  • The rent (which, for a period of time, cannot be increased from its usual amount as a way of bypassing this Act).
  • Tenant default payments (which can be requested to replace lost keys or for a late payment fine. However, these payments can only be charged if stated in the tenancy agreement).
  • A refundable holding deposit to “reserve” a property (which cannot be more than one weeks rent).
  • Landlords and Agents will be capped at charging tenants no more than £50 for a change of tenancy request, unless the Landlord can demonstrate greater costs are incurred.

All other payments will be prohibited.

What will be the penalties?  

Local Trading Standards offices of local councils will enforce the Act. Landlords and Agents found charging prohibited payments can face fines up to £30,000, court orders banning them from letting properties for a year, and face a criminal prosecution if the same offence is committed within 5 years. In addition, Landlords may also be required to repay the prohibited payment.

If you have any queries on how the Tenant Fees Act 2019 will affect you, please contact Frank Smith & Co Solicitors on 01242 801748.

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