What Is The Tenant Fee Bill 2019?
The Tenant Fee Bill is set to come into force on June 1 2019 and will apply to all tenancies signed after this date.
It states that lettings agents and landlords in England will no longer be able to charge mandatory fees, while tenants will no longer have to use a specific service or take specific insurance.
Scotland, Wales and Northern Ireland each have their own tenant laws so this does not apply to tenancies in those regions.
What fees are being banned?
As part of the Tenant Fees Bill, landlords and letting agents will no longer be able to charge for the following:
- Credit checks & Referencing
- Administration charges
- Property inventories
- Mandatory use of specific insurance companies
- Renewal, Exit or Guarantor fees
What fees can be charged?
After the Tenant Fees Bill comes into effect, landlords and letting agents will be able to charge for the following:
- A deposit with a maximum of five weeks rent (this increases to six weeks on a property with rent over £50,000 / year)
- Lost keys or security fobs
- Breach of Contract including late payment of rent after 14 days
- A charge of no more than £50 for a change of tenancy such as adding a new person to the tenancy agreement
Other charges can be offered as ‘optional extras’ with the tenant’s permission:
- Cleaning services when vacating a property
- Gardening or grounds maintenance
What are the penalties?
1st Offence: Fines of up to £5,000.
2nd Offence: A second offence within 5 years is considered a criminal offence and liable for an unlimited fine. Alternatively, a £30,000 fine may be put in place instead of a criminal charge.
Landlords are not required to refund any fees charged as part of the original tenancy agreement but no additional fees after June 1st 2019 can be applied. If the tenancy is renewed, the new laws will apply.
In the event of a late rent payment after 14 days, agents will not be able to charge more than 3% over the Bank of England base rate in interest from the date of the original late payment.
Landlords and agents will not be able to offer different levels of rent, such as lower introductory rent for three months before the price goes up. This is to prevent agents from offsetting the loss of income with rent.
Charging for reminders is not permitted.
Landlords and agents can charge more rent for a pet, as long as it is made clear in the contract as an extra fee. Agents cannot charge an increased deposit or holding deposit for the pet.
Contracts can state that a tenant must return the property in the same condition they found it i.e professionally cleaned. The tenant should be given the option of restoring the property to the same standard or can be offered the option of paying a professional service through a letting agent or landlord.