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The Ban on Tenant Fees – England

On 12 February 2019, the Tenant Fees Act was passed into law. Announced in the Autumn Statement on 23 November 2016, the ban on tenant fees was introduced to Parliament in May 2018 as the Tenant Fees Bill.

In January, the Housing Minister in the House of Lords, Lord Bourne of Aberystwyth made a statement revealing that from 1 June 2019, all new and renewed tenancies will come under the scope of the new ban. All existing tenancies will be brought under the new rules from 1 June 2020.

“Implementation is, of course, subject to parliamentary timetables, and amendments we have made need to be considered in the other place. We also need to allow a period of time following Royal Assent to enable agents and landlords to become compliant with the new legislation. We, therefore, intend for the provisions of this Bill to come into force on 1 June 2019. This would mean that the ban on letting fees would apply to all new tenancies signed on or after this date.” Lord Bourne of Aberystwyth, Tenant Fees Bill, Third Reading House of Lords 15 January 2019

Tenant Fees Act

The Tenant Fees Act sets out the Government’s approach to banning letting fees for tenants. The key measures of the Act include:

  • Tenancy Deposits must not exceed the equivalent of five weeks’ rent (unless the annual rent exceeds £50,000 in which case deposits are capped at six weeks’ rent).
  • Holding Deposits will be capped at no more than one week’s rent.
  • The amount that can be charged for a change to a tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred.
  • The Consumer Rights Act 2015 is amended to specify that the letting agent transparency requirements should apply to third-party websites.

Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:

  • A change or early termination of a tenancy when requested by the tenant.
  • Utilities, communication services and Council Tax.
  • Payments arising from a default by the tenant where they have had to replace keys or a respective security device, or a charge for late rent payment (not exceeding 3% above the bank of England base rate).

A breach of the fees ban will be a civil offence with a financial penalty of up to £5,000.