Tenant Fees Act 2019

Category: News

From 1 June 2019 the Tenant Fees Act 2019 comes into force, the purpose of which is to ban letting fees paid by tenants and set a cap for tenancy deposits.

Currently there is very little legislation which controls how much a landlord or letting agent can receive as a deposit and/or charge a tenant for ‘fees’ associated with renting the property, which can range from referencing fees to moving out fees. However, from 1 June 2019 the charges which can be imposed on a tenant are being severely restricted.  

Who does the act apply to?

The Act applies to all private residential landlords.

What can a landlord charge for?

Schedule 1 of the Act provides a list of permitted payments, which include:-

  • Rent under a tenancy
  • A tenancy deposit
  • A holding deposit; the equivalent of up to one weeks rent.
  • In the event of a default; this includes where a tenant has lost a key or fails to make a rental payment 14 days after it became due.
  •  Assignment or a variation the terms of a tenancy.
  • Where a tenancy is terminated early
  • Council Tax
  • Utilities; so far as the tenancy agreement requires the payment to be made
  • TV licence;  so far as the tenancy agreement requires the payment to be made
  • Communication services including a telephone, internet, cable or satellite TV; so far as the tenancy agreement requires the payment to be made

However, the above are subject to certain limitations which ought to be considered on a case by case basis.  

What is the maximum deposit a landlord can request?  

The Act imposes restrictions on the amount a landlord can receive as a deposit and if a landlord receives more than they are legally allowed the excess will be classed as a prohibited payment.

Where the annual rent is less than £50,000.00 the deposit cannot exceed five weeks rent; where the annual exceeds £50,000.00 the deposit cannot excess six weeks rent.

What are the sanctions?

If an enforcement authority is satisfied beyond reasonable doubt that a landlord and/or letting agent have breached the Act it can impose financial penalties subject to certain limitations for example where criminal proceedings have been started against the offender. 

The landlord may also be required to repay the prohibited payment to the tenant or someone acting on the tenants behalf.

Finally, if a landlord is found guilty of an offence under the Act they will be liable on summary conviction to a fine, this will not exceed £5,000.00.

The above is a whistle-stop tour of the Act and we would encourage any landlords who are unsure as to what can and cannot be charged to contact us.

Contact our team on 01752 827089 or get in touch at https://www.nash.co.uk/business/dispute-resolution/

For more information go to https://www.gov.uk/government/collections/tenant-fees-act