There have been many changes over the last few years when it comes to renting a property. The latest is the tenant fee ban. Here’s some up-to-date info on this new change for both tenants and landlords.
What the tenant fee ban is
This fee ban called The Tenant Fees Act was introduced on June 1st 2019. It prevents letting agents and landlords charging additional letting fees which tenants have always had to pay such as:-
- Charges for viewings
- Charges for reference checks
- Renewing tenancy agreements
When tenants paid these fees in the past, the amount often added up to around £300 on top of the cost of renting a property.
The new Tenant Fees Act actually caps the size of the deposit letting agents and landlords generally ask for. If a landlord asks for a higher deposit than necessary, he or she can be penalised to the tune of £5,000.
Landlords – what the tenant fee ban means for you
Changes landlords can and cannot do regarding charges, in addition to the rent.
One of the most important changes is not charging fees that are associated with the letting of a property. Expenses for these will have to be covered by landlords themselves. There are however some exceptions to this rule:-
- The deposit on a property is capped at five weeks rent (this is for the majority of properties). Should the rent be over £50,000, six weeks rent can be asked for.
- A holding deposit which can be charged has to be capped at one week’s rent and is refundable.
- Landlords are able to charge for an early termination fee but this is also capped at the incurred cost.
- Under certain circumstances, default fees can be charged. If the house keys are lost for example, fees then come into play. Default on rental payment is another issue if the default is more than two weeks.
- If a tenant asks for changes to the tenancy agreement, landlords can ask for up to a maximum of £50 for admin costs.
For tenancies in-place before this Act was introduced, landlords now have until June 1st 2020 to adhere to the new regulations.
Many landlords have experienced increased costs recently with tax changes and new stamp duty rules being introduced. This new fee ban may result in high rents, although the average increase is less than lots of tenants were paying in fees under the old system.
Tenants and the new fee ban change
Tenants can expect cheaper rents while not being subjected to high charges from certain sectors of the industry. Problems with unfair fee charges have been going on for far too long.
If you’re searching for a rental property, letting agents and landlords cannot charge you for administration fees, a check-out fee when you decide to leave or referencing. They also cannot charge for guarantor fees.
Are you being charged for any fees on the banned list? If so, you should ask for professional advice.