One of the biggest pieces of lettings legislation to come into effect in 2019 was the Tenant Fees Act.
Aimed at making renting fairer for tenants, the Tenant Fees Act was a major change for landlords and lettings agents.
The Tenant Fees Act has been in place for just over 12 months now, so let’s look at what’s changed in 2020 and remind landlords what the rules are.
What does the tenant fee ban mean?
The Tenant Fees Act 2019 came into effect on June 1, 2019 and meant that, from that date, landlords and lettings agents were no longer able to charge tenants a host of fees in relation to their tenancies.
Tenant fee ban update
Between June 1, 2019 and June 1, 2020, the ban on fees applied to new tenancies only, so agents and landlords were still able to charge fees in relation to tenancy agreements that were signed before June 1, 2019.
However, since June 1, 2020, the Tenant Fees Act has applied to all tenancies.
The Tenant Fees Act 2019: What are tenant fees?
Under the Tenant Fees Act 2019, landlords and lettings agents are no longer able to charge the following fees to tenants:
- Viewing fees
- Referencing fees
- Guarantor fees
- Inventory and check-in fees
- Credit check fees
- Inventory and check-out fees
- Admin fees
- Pet fees or deposits
- Gardening service charges
As well as monthly rent, agents and landlords are
able to charge:
- A refundable deposit, which is capped at five weeks’ rent under the Tenant Fees Act, or six weeks if the annual rent exceeds £50,000
- A holding deposit, capped at one week’s rent under the Act
- For lost keys
- For late payment of rent once 14 days or more have passed, with interest capped at no more than 3% above the Bank of England base rate per day
- For changes to the tenancy agreement requested by the tenant, capped at £50 unless the landlord can show additional costs were incurred
The tenant fee ban: Early termination
If a tenant wishes to terminate their tenancy agreement before the end of its fixed term, landlords can charge an early termination fee.
However, under the Tenant Fees Act, this fee must not be more than the loss incurred by the landlord through lost rent up until the end of the agreement and any other costs such as re-marketing.
Fines for breaching the tenant fees ban
Landlords breaching the fees ban can be fined up to £5,000, with a further fine of up to £30,000 for further breaches within five years.
As well as those fines, landlords who charge banned fees cannot evict a tenant via a section 21 notice until the fees have been repaid in full.
Further reading…
If you’re looking to take on a tenancy agreement for the first time, take a look at our guide to renting, which provides helpful tips and guidance.
When renting, it’s essential that you know your rights as a tenant, too, and we’ve outlined these for you right here.
