With everything that’s happening at the moment, landlords could be forgiven for taking their eye off the ball. However, buried in all of the news is a piece of legislation which could potentially affect thousands of landlords.
From 1 June 2020, landlords won’t be able to charge their tenants any fees, other than certain defined charges, even if they were mentioned and agreed upon in the original tenancy agreement*.
It’s the second part of the Tenant Fees Act which was introduced in June 2019 to limit the fees charged to tenants for the likes of rents, deposits, defaults, tenancy charges, terminations and utility services. At the same time, rental deposits were capped to five weeks. When it was first rolled out, the Act only applied to new tenancies. However, all applicable tenancies and licences will now fall under the Act’s remit. It makes renting a property more transparent as tenants can now see what a given property will cost them in the advertised rent with no hidden costs.
From June, landlords won’t be able to charge tenants for things like references, credit and immigration checks, administration costs and property viewings.
Landlords will still be able to charge for rent and ask for a refundable deposit, but this will be capped at no more than five week’s rent where the total annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or more.
They can also charge a refundable holding deposit of no more than one week’s rent; payments in respect of utilities, communication services, TV licences and council tax; and default fees for late payment of rent or if a key or security device needed to access a property is lost.
If a landlord has already taken a banned fee, tenants can reclaim their money through the county court. Landlords failing to adhere to the new legislation could face a fine of up to £30,000.
As a move to protect tenants from unfair and disproportionately high fees, it’s one I strongly agree with. As the Group Managing Director for one of the UK’s largest buy to let lenders, I want to see a private rented sector that treats tenants fairly, as well as one which creates an environment where those landlords who pride themselves on offering quality accommodation can flourish and still turn a profit.
It’s up to all of us to ensure landlords are aware of the changes, especially as it’s something that could slip under the radar while their attention may be elsewhere. It’s at times like these when brokers can demonstrate just how important they are to their customers – not just as someone who could find them the right product, but as someone who can keep them on the right side of the law and, potentially, help them to avoid thousands of pounds in fines.
