The Tenant Fees Act 2019
The Tenant Fees Act 2019 is now in force and this piece of legislation will directly impact you if you are a landlord or tenant of residential property.
The new law relates to residential tenancies and licences in England, including:
- assured shorthold tenancies;
- student lettings; and
- licences to occupy housing (with some exceptions) and relate to tenants, guarantors and parties acting on behalf of tenants.
Landlords and letting agents are now prohibited from charging tenants’ certain fees at the start of a tenancy agreement, such as:
- tenancy set-up fees;
- viewing fees;
- credit-check fees;
- inventory check fees; and
- fees for professional cleaning services.
From 1 June 2020 the prohibitions above will also apply to existing tenancies – if a landlord or letting agent receives such a payment it must return it within 28 days.
The new law also:
- prohibits landlords from increasing the first month’s rent to cover the additional expenses;
- prohibits the landlord from requiring the tenant to loan money to anyone and to contract with third party service providers or insurers;
- restricts the amount of holding deposit a landlord can require to reserve a property before the tenancy is granted to one week’s rent; and
- restricts the amount of deposit that can be requested from the tenant to five weeks’ rent where the annual rent is less than £50,000 and six weeks’ rent where the annual rent is more than £50,000.
What happens if I break the rules?
A breach of the new laws can result in a financial penalty of up to £5,000 by the local weights and measures authority. A landlord or letting agent is guilty of a criminal offence if they commit a further breach within 5 years – the penalty being an unlimited fine. Whilst the landlord is in breach of the new laws it is not entitled to serve notice on the tenant to terminate the tenancy.
If you are a residential landlord and your tenancy agreement provides for these types of charges, you need to take urgent action. Our Commercial Property department can assist you with any changes you need to make to ensure you are compliant please get in touch via phone or email, or via our website, dawsonradford.co.uk.
Please note that this article is for general information purposes and does not constitute legal advice.