Law News,Tenant Fees Ban

Tenant Fees Bill Receives Royal Assent to Become Act of Parliament

Em Morley - February 13, 2019

The Tenant Fees Bill has received royal assent to become an Act of Parliament in England. It will come into force on 1stJune 2019. 

From this date, landlords and letting agents in England will no longer be able to charge upfront fees to private tenants. It is expected to save renters at least £240m per year.

It will also cap the amount a tenant can pay in a refundable security deposit to the value of five weeks’ rent, as well as capping the amount of holding deposit a tenant would be required to put down to secure a property to just one week’s rent.

The Government believes that the act will make renting properties in England fairer and more affordable for tenants, by reducing costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental sector.

David Cox, the Chief Executive of ARLA Propertymark, responds to the news: “We’ve known the tenant fees ban has been coming for a long time, but, with only 109 days to go until it comes into force, the industry must start taking time to prepare.

“The Government will soon publish its guidance now that we have legislative certainty, which will give agents a better understanding as to how the ban should practically be implemented.”

Under the terms of the new law, the maximum amount that can be charged for a change to a tenancy is £50. Any landlord or agent breaching the ban for the first time will be hit with a £5,000 fine.

The Housing and Communities Secretary, James Brokenshire MP, says: “Tenants across the country should not be stung by unexpected costs from agents or landlords.

“This is part of our ongoing action to make renting fairer and more transparent, and make a housing market that works for everyone.”

Brokenshire explains that, under the act, agents will only be able to recover reasonably incurred costs from tenants, which will put a stop to, for example, “tenants being charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace”.

He continues: “The act also ensures that tenants who have been charged unfair fees get their money back quickly, by reducing the timeframe during which landlords and agents must pay back any fees that they have unlawfully charged.

“Taken together, these provisions help reduce the costs that tenants can face at the outset, renewal and termination of a tenancy.”

Brokenshire explains: “The act is part of a wider package of Government reforms aimed at rebalancing the relationship between tenants and landlords, to deliver a fairer, better quality and more affordable private rental market.

“We have introduced a range of powers for local authoritiesto enable them to crack down on the small minority of rogue landlords and agents who let unfit properties. This includes fixed financial penalties of up to £30,000 and banning orders – possibly for life – for the most serious offenders.”