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Tenant Fees Act

Tenant Fees Act 2019 

In June 2019 the government introduced a new law called the Tenant Fees Act. The Tenant Fees Act bans most letting fees and caps tenancy deposits paid by tenants in the private rented sector. 

When the ban came into effect it applied to all new or renewed tenancies signed on or after 1 June 2019. A transitional period ended on 1 June 2020 and now the act applies to all existing tenancies. 

What is a Prohibited Payment under the Tenant Fees Act? 

The  Act explicitly sets out permitted payments that can be charged to Tenants by Landlords or Letting agents. If it’s not on the list, it’s a prohibited payment. 

  • Rent 
  • Tenancy deposit capped at 5x weeks rent. Or 6x weeks rent where annual rent is over £50 000 
  • Refundable holding deposit capped at 1 weeks rent 
  • Payments associated with ending the tenancy early by the tenant, capped at rent until the end of the tenancy or until a new tenant is found. Plus, losses incurred through re-advertising. Does not include ending the tenancy with a break clause specified in the tenancy contract. 
  • Payments to change the tenancy, capped at £50 or higher if justification can be given 
  • Payments for utilities, communication services, TV licenced or council tax 
  • Default fee for late payment of rent and replacement of lost keys/security device 

If a landlord or letting agency charges a tenant anything that isn’t above, then they are asking for a prohibited payment. See the guidance <Here> on Gov.uk https://www.gov.uk/government/collections/tenant-fees-act 

What the Tenant Fees Act means for Tenants 

You started your Tenancy on or After 1 June 2019 

If your tenancy started after or on 1 June 2019, and you had to pay anything that isn’t listed above, then you may be entitled to claim that money back.  

You Renewed your Tenancy on or After 1 June 2019 

If you had to pay any charge that’s not listed above, then you may be able to claim this money back. Additionally, if you’re deposit is more than 5 weeks of rent, then you may be able to claim the difference back as well. 

Your Tenancy Started Before 1 June 2019 

If your tenancy started before 1 June 2019 then any fees not listed above are no longer legally binding. Unless they were incurred on or before 31 May 2020 as this was the cut-off date for the transition period. 

Anything paid before 1 June 2019 you can’t claim for. 

Tenant Fees Act for Students 

Students are also covered by the tenant fees act. Whether you are in a student accommodation block or HMO you are also covered like any other private renter. 

So, if you have paid a prohibited payment under the fees act check this guide by Money Saving Expert. It’s a great step-by-step guide on how to claim back a prohibited payment. Also, see the Official government guidance for Tenants.

What the Tenant Fees Act means for Landlords/Letting agencies 

What the Act means for Landlords/Letting agencies is like the above but the other way round. You may have to pay back money, but there are also some hefty fines involved. 

If you breach the act, you can be fined up to £5000 for each breach on top of paying back your tenants. Your tenants can also claim interest, but that is up to who is enforcing the Tenancy Fees Act. If you breach the act on two occasions within 5 years you can be given an unlimited fine plus jail time. The enforcing authority could also add you to the “Rogue Landlord Database”. 

See the Official government guidance for Landlords

So whether you’re a landlord/ letting agency or tenant, make sure you are aware of what’s changed with the Tenancy Fees Act. A breach of the Tenant Fees Act will also prevent you from carrying out a Section 21.

*Disclaimer: The information on the Sell my house quickly Leeds website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

 

 

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