The Tenant Fees Act 2019 came into effect at the beginning of last month and if you are part of the growing number of people that will live in rented accommodation during the course of their lifetime, or you have a property that you’ll be renting out, then it is worth knowing just what this new bit of Government legislation means and how it will affect you. Sebastian Hale-Smith explains more.
If you have rented a property prior to 1 June 2019 you might have been surprised at how quickly the administration fees added up. Tenancy renewal fees, credit check fees, and fees for providing references created a side-line for Landlords and Letting Agents that averaged £400 per rental and on top of a deposit, van hire, and other moving costs this can make getting a place of your own harder than it already is. Landlords struggled with unclear regulations that did not provide a clear guideline.
The citizens advice bureau, amongst other organisations, have been calling for change and new legislation to protect tenants and regulate rental procedures for over a decade .
Letting fees have now been banned in England. Unless the fee falls under the Act’s definition of a ‘permitted payment’ it can no longer be levied. The permitted payments encompass the type of things you might expect to pay when renting a property – the deposit, the rent payments, and the utilities to name a few – but gone are the obliquely named ‘admin charges’ with no explanation to how they were incurred or how many hours work went into them.
The new legislation allows Landlord’s and Letting Agents recover their ‘reasonably incurred costs’, but that’s not all it does: Rent deposits, for properties with annual rent of £50,000 or less per year, are now capped at an amount equivalent to 5 weeks rent and the rent itself is no longer allowed to fluctuate month to month. The Government believes that the introduction of the Tenant Fees Act is going to save England’s tenants £240m per year.
In response to this new legislation we can expect to see rent increases to cover the shortfall and possible refusals to provide certain services as the ability to charge for them has been taken away by this Act.
The silver lining for all involved in this transaction is there are no more hidden surprises. Sometimes surprises are good things, but they’re best avoided when renting a property because they slow down, and can even halt, the process. With everyone’s cards on the table, even if the rent is a little higher, at least tenants and renters alike can see that everything is above board and sleep soundly – in their new bedroom.
Landlords and Agents who contravene the Act can expect a fine of up to £5,000 for a first offence, rising up to £30,000 fine for repeat offenders.
So, if you’re going to be a tenant in rented accommodation (even if you’re a student – traditionally getting the rough end of the deal when it comes to housing!) or you’re renting a property out to a new tenant make sure you’re protected, and not breaching, the new Tenant Fees Act.
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