The Tenant Fees Act

A draft Tenant Fees bill was created in 2017, and on 12th February 2019, the bill was passed. From June 1st, the new Tenant Fees Act becomes part of English law – but what is it, and what does it actually mean for renters? 

 

Why the Tenants Act 2019 has been introduced

The idea behind the Tenant Fees Act 2019 is to make renting more affordable and fairer for tenants in England by reducing the costs associated with renting; right from the very start of the renting process.  (Since 2012, a similar ban on unfair letting fees has been in force in Scotland, and Wales will see it achieve the same this coming autumn.) 

In the past, the practice of letting agents charging ‘hidden’ fees (for example, an ‘admin’ fee) was commonplace, and some landlords would overcharge their tenants for relatively minor damages or expect a very high security deposit amount to be paid upfront – but the introduction of the new Act means that these practices are now banned.  

The new laws ensure that prospective renters will have a far more transparent view of what a particular property might cost them to rent. 

The Government estimates that these new rules could save tenants across England at least £240m each year. 
 

Who does it apply to?

The new law will apply to you if you’re renting privately with an assured shorthold tenancy. It will also be applicable to you if you’re a lodger with a live-in landlord, or you live in student housing.  

Bear in mind though, that if you’re already a tenant of a property, these new rules won’t apply to you until you sign a new contract or start a brand-new tenancy at another property. 
If you’re renting privately right now, there will be a few things you’ll still be liable for and will need to pay for if they happen to you. These include covering the cost of losing a key belonging to your rented property, paying possible penalties for late rent payments (over 14 days late) or costs associated with wanting to make a change to the existing tenancy agreement (for example, bring it to an end early).  
 

What do the new rules include?

From the 1st June 2019: 
 

• Private tenants (in England) will no longer be charged any form of letting fee by letting agents when they enter into a tenancy agreement to rent a property. This includes any fees for references, credit checks, or ‘admin’ fees.
• New tenants will only be expected to pay a security deposit amount of no more than the equivalent of five weeks’ worth of rent.
• Letting agents/landlords will not be allowed to charge their private tenant/s a fee if they renew their tenancy.
• Tenants cannot be charged any more than the amount of £50 for ‘a change’ to the tenancy (unless a landlord can prove that the change means they’re personally out of pocket by more than £50).
• Only the equivalent of one week’s rent will be due as a holding deposit.
• Landlords will not be permitted to evict tenants from a property under the Section 21 procedure until they have refunded any deposit money or unlawful fees charged to the tenant/s.

If an agent or landlord ignores any of the new rules within the Tenants Act, they can be liable to pay fines of between £5,000 and £30,000. In the very worst cases, and for repeat offenders, they can face criminal charges too. 
 

If you are still being asked to pay letting fees…

From June 1st 2019 onwards, if you find you’re being pressured by a landlord or letting agent to pay a fee which you believe falls under the tenant fee ban, contact your local Citizen’s Advice as soon as possible.

You can find full information on The Tenant Fees Act on the official GOV.UK website.