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HomeLandlordHOW DOES THE TENANT FEES ACT AFFECT YOU?

May 26

HOW DOES THE TENANT FEES ACT AFFECT YOU?

From the 1st June 2019, letting agents and landlords in England won’t be allowed to charge fees to tenants or guarantors. The Tenant Fees Ban or “Tenant Fees Act 2019” applies to all new tenancy agreements entered on and after the 1st June 2019. How does it affect our landlords and tenants?

Tenancy agreements entered before the 1st June 2019 are still subject to the tenant fees as stated in the contract such as renewal fees until the 31st May 2020.

 

THE ONLY PAYMENTS THAT CAN BE CHARGED TO TENANTS ARE:

      • rent
      • a refundable tenancy deposit
      • a refundable holding deposit
      • payments to change a tenancy (when requested by the tenant)
      • payments associated with early termination of a tenancy (when requested by the tenant)
      • payments for certain utilities and services default fees for late payment of rent
      • replacement of lost keys.

 

A breach of this legislation can be considered a civil offense, with a financial penalty of up to £5,000. Any further breaches within five years could result in a criminal conviction, a banning order and an unlimited fine. If a local authority chooses not to prosecute they can impose a financial penalty of up to £30,000 as an alternative.

 

The government has issued detailed guidance for Landlords and Letting Agents, Tenants and Enforcement authorities which you can find here.

 

We have heard a lot about how this is affecting letting agents revenues but how does it affect landlords?
Well, it depends on the agent!

 

FOR OUR LANDLORDS AND TENANTS: 

 

      • Tenant and guarantor referencing, right to rent and credit check, contract administration costs are included in our main letting commission.

     

      • Security deposits are capped to 5 weeks for annual rents below £50,000.
        If existing security deposits are 6 weeks, then 1 week rent will have to be refunded to the tenant at the next tenancy renewal date. It is not allowed anymore to ask a higher security deposit for pets.

     

      • Security deposits for annual rents above £50,000 stay at 6 weeks.

     

      • Holding deposits (1 week rent) can only be retained for 15 days or for an agreed time. If the tenant pulls out after 15 days or drags its feet beyond the agreed deadline, the holding deposit is not refunded. If the landlord pulls out after 15 days or drags its feet past the agreed deadline, the holding deposit must be refunded.

     

      • Change of tenant during the tenancy can be charged maximum £50 if the tenant has requested it.

     

      • In case of early tenancy termination initiated by the tenant, it is allowed to charge the rent loss due until the end of the initial tenancy agreement. But it is not clear what is considered reasonable by the law. If a tenancy is signed for 2 years and the tenant leaves early, it wouldn’t be reasonable to charge the nearly 2 years rent.

     

      • Deposit registration to the DPS is free of charge, as always.

     

      • In case of loss of keys and security devices (FOB), tenants can be charged at a reasonable cost.

     

      • Check-in AND check-out inventory reports are issued by a third party and are at the landlord’s charge. Costs vary according to the number of bedrooms and the property’s size, ranging from £200 to £380 for both reports.

     

      • Our tenancy agreement states that tenants are responsible for returning the property in the same condition as when they received it. If a tenant fails to clean satisfactorily, we will deduct the cost from the security deposit. Any damage caused by tenants is also to be deducted, as before. Fair tear and wear is excluded.

     

      • Rent arrears and interests can still be charged to tenants at 3% above the Bank of England’s rate, from the day the rent was due until it is paid. However, it is not allowed to charge anything if the delay of payment is under 14 days.

 

 

You can find our Letting Services and all our Fees listed here: 

OUR LETTING SERVICES

OUR FEES


If you have any questions about the Tenant Fees Act 2019 and how it affects you,
please feel free to email Muriel at [email protected] or call 07341 443 858


Wise Rock Property belongs to The Property Ombusdman and Safe Agent
and is committed to provide you with the best standards in residential lettings

 

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