New law protecting tenants came into force on 1 June 2019
The Tenant Fees Act 2019 came into force on 1 June.
The Tenant Fees Act bans most letting fees and caps tenancy deposits paid by tenants in the private rented sector in England. The ban on tenant fees applies to new or renewed tenancy agreements signed on or after 1 June 2019. The government guidance on the Act for tenants, landlords and letting agents helps explain how this legislation affects them.
The aim of the Act is to reduce the costs that tenants can face at the outset, and throughout, a tenancy. Tenants will be able to see, at a glance, what a given property will cost them in the advertised rent with no hidden costs.
The party that contracts the service – the landlord – will be responsible for paying for that service, helping ensure the fees charged reflect the real economic value of the services provided and sharpen letting agents’ incentive to compete for landlords’ business.
Local enforcement authorities have primary responsibility for enforcing this legislation. The Tenant Fees Act created an independent lead enforcement authority to provide advice and information to local authorities on the Act. Bristol city council has been appointed as the lead enforcement authority for lettings.
From 1 June 2019, the only payments that landlords or letting agents can charge to tenants in relation to new contracts are:
- A refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- Payments associated with early termination of the tenancy, when requested by the tenant
- payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- payments in respect of utilities, communication services, TV licence and Council Tax
- A default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement.