Tenant fees ban
Landlords and letting agents will soon be banned from charging tenants fees unless they are permitted by law. The ban applies to all assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing
The Tenant Fees Act 2019, which comes into force on 1 June 2019, prohibits landlords and letting agents from charging fees unless they are included in the list of permitted fees, which includes:
- rent payments
- refundable deposit (capped at five weeks’ rent)
- refundable holding deposit to reserve a property (capped at one week’s rent)
- payments to change the tenancy (capped at £50)
- early termination
- utilities, TV, phone and internet and Council tax
- default fee for late payment
- replacement of lost key, where required by the tenancy agreement.
Any fee or charge which does not fall into one of these categories will be prohibited, such as credit checks, inventories and references.
Anyone who charges a prohibited fee can be issued with a financial penalty of up to £5,000. If a second breach is committed within five years it becomes a criminal offence and can be dealt with by prosecution or a financial penalty of up to £30,000.
If a tenant has been charged a prohibited fee, legal eviction procedures cannot be used until the fee has been repaid. Tenants will also have the right to recover unlawfully charged fees through the First-Tier Tribunal or the relevant redress scheme where it concerns an agent.
Initially, the ban will only apply to tenancies which begin after 31 May 2019 however, from 1 June 2020 the ban will apply to all existing tenancies which were not previously caught by the ban. For tenancies that begin before 1 June 2019, prohibited fees can still be charged until 1 June 2020, but only if they are required by the tenancy agreement.
Duty of letting agents to publicise fees
On 27 May 2015, the Consumer Rights Act came into effect, placing a duty of letting agents to display their fees.
Letting agents must display fees:
- on each of their premises where they deal face to face with persons using, or proposing to use, services to which the fees relate
- the list must be displayed in a place where it is likely to be seen
- they must also display the list on their website, if they have one.
The list of fees displayed must include:
- an adequate description of each fee and its purpose
- whether the fee is payable for the accommodation or by each tenant
- the total amount of the fee inclusive of all taxes
- the method of calculating the fee, if the fee cannot be determined in advance.
In addition in England, letting agents engaging in letting agency or property management working relating to dwelling houses must display:
- a statement of whether they are a member of a client money protection scheme, if they hold client's money
- a statement that they are a member of a redress scheme, and the name of that scheme, if they are required to be a member.
What fees need to be displayed?
The duty to display fees, applies to fees, charges or penalties or penalties payable to the letting agent by a landlord or tenant in connection with letting agent or property management work or otherwise in connection with an assured tenancy.
However the duty does not apply to the following:
- rental charges
- tenancy deposits
- any fees, charges, penalties that the letting agent receives from a landlord under a tenancy on behalf of another person
- any other fees, charges or penalties specified in regulations.
Failure to comply with these requirements can lead to a financial penalty of up to £5000 for each breach.
Reporting a breach
If you think that an agent or landlord is charging a prohibited fee or has not complied with their requirement to display fees, you can inform Telford & Wrekin Council:
Telephone: 01952 381818
Last updated: 03/03/2021 12:14