TENANT FEE BAN
From the 1st June 2019 Landlords / Agents will no longer be able to charge certain payments to tenants in connection with a tenancy. (This will include anyone acting on their behalf or guaranteeing their rent).
The only payments that can be charged to a tenant are:
- Rent
- A refundable deposit capped at no more than 5 weeks’ rent where the annual rent is less than £50,000 or 6 weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit ( to reserve a property) capped at no more than 1 weeks’ rent
- Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
- Payments associated with early termination of the tenancy if requested by the tenant
- Payments in respect of utilities, communication services, TV licence and council tax
- A default fee for late payment of rent and replacement of a lost key / security device, where required under a tenancy agreement
Any other fees will be classed as a prohibited payment.
Prohibited Payments
All charges not specifically listed as a permitted payment will be prohibited under the tenants fee ban. Examples include:
- Application fees
- Tenancy set up costs
- Referencing of tenants and referencing for future landlords
- Contract negotiation
- Inventory
When does the ban apply?
From June 1st 2019 if you enter into a tenancy agreement, student let or licence to occupy housing in the private sector, you will be prohibited from charging any fees or payments to tenants other than those listed above.
As a result landlords will be responsible for the costs associated with setting up, renewing or ending a tenancy. Agents and landlords do not have to pay back any fees paid prior to the 1st June 2019.
For existing tenancies
If a tenancy agreement was entered into before the 1st June 2019, fees written into the agreement can still be charged however after 1st June 2020, any terms requiring payment of fees listed as a prohibited payment will no longer be binding.
Holding Deposit
To show commitment to proceed with a property we will be able to ask a prospective tenant to pay a holding fee equal to 1 weeks rent. This holding fee will form part of the rent or deposit payment made at the start of the tenancy. There are certain circumstances when this can be retained for example if the prospective tenant has failed right to rent checks or provided false or misleading information. In most circumstances if the tenant does not proceed with the tenancy this fee will have to be refunded.
Deposits
In relation to the deposit held, there is no requirement to return any amount of tenancy deposit that is over the cap for tenancy agreements that were entered into prior to the Tenant Fee Ban coming into force. This will of course change if the tenants enter into a new agreement, at which point any deposit payment over the capped amount including pet deposits will have to be re-paid to the tenant.
Pet Deposits
Pet deposits will be classed as a prohibited payment, however we will be able to advertise the property with two rental figures one for no pets and a higher rental figure if pets are allowed to reflect additional wear & tear.
The Tenant Fee Ban does not prevent landlords and agents from claiming damages for breach of tenancy agreement, so damage caused by pets can still be claimed for.
Consumer Rights Act
Under the Consumer Rights Act 2015 letting agents must display and publicise their fees to consumers. All agents must be a member of a government approved Client Money Protection Scheme and a redress scheme, details of which should all be clearly displayed.
To confirm Castle Estates (Staffordshire) Limited are Members of The Property Ombudsman and ARLA Property Mark Client Money Protection Scheme.