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TENANT FEES BAN 2019 – A Guide for Tenants

From 1 June 2019, the Tenant Fees Act came into force in England, meaning landlords and letting agents cannot charge additional fees that are not considered “Permitted Payments”, under the Act, to tenants. A similar act, the Renting Homes (Fees etc.) (Wales) Act 2019, comes into effect in Wales from 1 September 2019. Below you can find all the important changes that come into place, and make sure that your landlord or letting agent isn’t breaking any rules when it comes to what you pay.

Holding deposits

These are used to reserve a property. The landlord or agent can only take a maximum of one week’s rent per property and this can be held for a maximum of 15 calendar days or an agreed alternative deadline for agreement.

Holding Deposits must be returned to the successful tenant within 7 calendar days. With the tenant’s consent, the Holding Deposit can be put towards the first month’s rent or Tenancy Deposit. The Holding Deposit must also be returned to the tenant if the landlord or agent pulls out before the deadline for agreement.  

The landlord or agent can keep the Holding Deposit if the tenant pulls out, fails a Right to Rent check, provides false or misleading information or drags their feet by the deadline for agreement. If the Holding Deposit is kept by the agent or landlord, then the reason for doing so must be outlined in writing.

If you purposely provide any false or misleading information (such as lying about your salary) when applying for the property, then the deposit may be withheld.

Tenancy deposits

Landlords and agents can ask for a refundable amount as security against damage to the property.  Usually, this is returned in full when you end a tenancy, with money taken off depending on what was agreed in your tenancy agreement.

Under the Tenant Fees Act, Tenancy Deposits will be capped at five weeks’ rent where the annual rent is less than £50,000 and six weeks’ rent where the annual rent is £50,000 or more. If your current deposit is over the 5-week cap before 1 June 2019, then the excess will be refunded when the tenancy ends, or you sign a new, fixed-term tenancy at some point in the future.

Always read through your tenancy agreement to know what might affect how much deposit you get back.

Pets

Landlords and agents cannot ask for a higher Tenancy Deposit for renting with pets, but landlords and agents can charge higher rent if you do plan on having a pet. This must be made clear to you in how the property is advertised, so you can make an informed decision. If you refuse to pay the higher rent, the landlord/agent does not have to allow you to have a pet.

Consider the costs if you’re planning on bringing a pet.

Tenancy deposit deductions

Although your deposit is capped at 5 weeks rent, your agent or landlord is still able to deduct from the amount for breaches of the tenancy agreement (such as damage or alterations). However, the amount deducted must be reasonable and reflect the accurate loss to the agent or landlord.

The best practice is to leave the property in the same condition as when you moved in. Make sure to take plenty of pictures to challenge any deductions you disagree with.

Default fees

Fees that can be charged during the tenancy.

Where they are outlined in the tenancy agreement these are limited to the reasonable costs for:

  • Replacing a lost key/security device (i.e. electronic fob)
  • Overdue rent

Replacing a lost key/security device

Charges for replacing a lost key or security device must be evidenced in writing to demonstrate the reasonable costs incurred by the landlord or agent. So, if the agent tries to charge you an unreasonable price for a new key, you can likely challenge the cost.

Make sure to ask for invoices, receipts or evidence in writing that shows what you’re paying matches the cost of whatever is being charged.

Late payment on rent

Landlords and agents can only charge interest on rent from when it is more than 14 days overdue.

Interest can be charged at no more than 3% above the Bank of England’s annual percentage rate, for each day it is outstanding.

Always pay rent on time to avoid paying more.

Contractor appointments

You cannot be charged a penalty for contractor call-outs or missed appointments. However, deductions can be taken from your Tenancy Deposit if there is a clause in your tenancy agreement that you may have broken (e.g. not returning the property to the state it was in when you moved in). You can be charged for work or repairs that are deemed necessary before the end of the tenancy (e.g. a broken window) if the damage that has occurred was your fault. But, if you are charged, your landlord or agent needs to provide accurate evidence of the costs required.

Play it safe, follow the rules laid out in your tenancy agreement, and avoid causing damage.

What payments are permitted under the ban?

These payments are allowed:

  • Rent
  • A capped, refundable holding deposit
  • A capped, refundable tenancy deposit
  • Default fees - replacement key/security device, late rent
  • Payment on variation, assignment or novation of a tenancy - if you request your contract to be changed
  • Payment on termination of a tenancy - if you decide to leave your tenancy before your contracted time
  • Payments in respect of Council Tax - if this is not included in your rent
  • Payments for utilities (electricity, gas/fuel, water/sewerage) - if these are not included in your rent
  • Payments for a TV licence - if this is not included in your rent
  • Communications services (internet, landline, cable/satellite television) - if these are not included in your rent
  • Green Deal charge - if applicable to your home

Always read your tenancy agreement to know what you’re being charged.

Prohibited payments

Fees that CANNOT be charged are ANYTHING NOT ON THE LIST ABOVE these include:

  • Credit checks
  • Inventories
  • Cleaning services/professional cleaning
  • Referencing
  • Admin charges
  • Gardening services

If you believe you’re being charged any fees illegally, then bring it up with your agent or landlord immediately.

WALES

From 1 September 2019, the Renting Homes (Fees etc.) (Wales) Act 2019 came into effect. The legislation bans letting agents and landlords from charging certain fees to tenants entering into Assured Tenancies (including Assured Shorthold Tenancies or ASTs) after this date.

Permitted Payments (Wales)

Charges that are allowed under the new act are as follows:

  • Rent
  • Security/Tenancy Deposit
  • A capped refundable Holding Deposit
  • Default fees – for breaches of contract such as missed appointments, damage to property, replacement keys, emergency callouts, late rent
  • Utilities – electricity, gas or other fuel, water, sewerage and Green Deal
  • Council Tax
  • TV licence
  • Communications services –internet, phone

Prohibited Payments (Wales)

Any fees or payments not specified above are illegal, including:

  • Admin fees
  • Application fees
  • Set up fees
  • Referencing fees
  • Credit checks
  • Permitted occupier fees
  • Contract negotiation fees
  • Inventory charges
  • Saturday move-in fees
  • Check-in fees
  • Check-out fees
  • Renewal fees
  • End of tenancy fees

Holding deposits (Wales)

These are used to reserve a property. The landlord or agent can only take a maximum of one week’s rent per property. Both parties then have a minimum of 15 calendar days to enter into the tenancy, this is called the Deadline for Agreement.  The Deadline for Agreement can also be extended by the landlord/agent and tenant in writing.

If both parties (landlord/letting agent and tenant) agree or do not agree to enter a tenancy, the deposit must be repaid to the tenant within seven calendar days

With the tenant’s consent, the Holding Deposit can be put towards the first month’s rent or Security Deposit. The Holding Deposit must also be returned to the tenant if the landlord or agent pulls out before the Deadline for Agreement.  

The landlord or agent can keep the Holding Deposit if the tenant pulls out of the agreement, provides false or misleading information or fails to take all required steps by the Deadline for Agreement.

If you purposely provide any false or misleading information (such as lying about your salary) when applying for the property, then the deposit may be withheld.

Security/Tenancy deposits (Wales)

Landlords and agents can ask for a refundable amount as security against damage to the property.  Usually, this is returned in full when you end a tenancy, with money deducted depending on what was agreed in your tenancy agreement and the condition of the property at the end of the contract.

Usually, the deposit is equivalent to a month’s rent, but there is no formal cap on the amount in Wales. A tenant may be asked for a higher deposit as extra security, for example, if they have a pet in the property that may cause damage.

Always read through your tenancy agreement to know what might affect how much deposit you get back.

Pets (Wales)

Landlords and agents in Wales are within their rights to charge a higher Security Deposit if you are bringing a pet into the property. This is to protect against any possible damage a pet may cause.

Consider the costs if you’re planning on bringing a pet.

Security deposit deductions (Wales)

Your agent or landlord can deduct from the amount of your Security Deposit for breaches of the tenancy agreement (such as damage or alterations).

The best practice is to leave the property in the same condition as when you moved in. Make sure to take plenty of pictures to challenge any deductions you disagree with.

Default fees (Wales)

Fees that can be charged during the tenancy arising from a breach in the tenancy agreement.

Where they are outlined in the tenancy agreement these are limited to the reasonable costs for:

  • Missed appointments – contractor callouts where the tenant isn’t home to allow entry or refuses entry
  • Purposeful/avoidable damage to the property
  • Replacing a lost key/security device (i.e. electronic fob)
  • Emergency/out of hours call outs – when the landlord/agent has to arrange a service urgently, such as a locksmith, for a problem caused by the tenant, such as locking keys in the house.
  • Overdue rent

Follow your tenancy agreement to avoid any fees.

Ending tenancy early (Wales)

If you want to leave a Fixed Term tenancy early, your landlord or agent is within their rights to be paid for the remainder of your tenancy.

Usually, your landlord or agent can come to an agreement allowing you to leave early, such as having you find a replacement tenant, or instead paying a lesser amount for the void period while your landlord finds a replacement tenant.

If you want to leave early, you may have to pay. Finding a tenant to replace you may save you and your landlord money and time.

What to do if your landlord/agent breaks these rules

If you believe that you have been charged an illegal fee or haven’t been refunded within the legal period of time, then take the following steps in the correct order to ensure your complaint is dealt with:

1

You must complain to your letting agent first. Speak directly to your agent and give them the chance to resolve the issue. Don’t forget to get an estimate of how long they think it will take to resolve the complaint. If you’re not happy with how they are dealing with it, then check the agency’s website and find their internal complaints procedure to raise your complaint about the agent in question.

2

If you have done everything you can directly through the agent and the complaint hasn’t been resolved, then you can take your complaint to a Government approved redress scheme. Every agency is legally required to be part of one, so check their website for a logo or link to contact either:

You can then register your complaint with the redress scheme used by the agent. They will carry out an independent investigation to try and resolve the complaint.

If you find that your agent isn’t part of an official redress scheme, then you can complain to your local trading standards department.

3

If you have completed Steps 1 & 2 and are still not satisfied with the response, then, providing they are a Propertymark protected member, you can complain to us. Although we can’t investigate complaints about tenancy deposits, we can investigate any agencies that breach our Conduct and Membership rules, resolve any complaints with adequate evidence and issue fines where necessary.

Final tips

Only ARLA Propertymark Protected agencies follow our strict regulations and are guaranteed to be up-to-date on the latest rules and legislation. Look for the logo when you’re searching for agencies; if your agent is not regulated; they will not be independently assessed against the highest industry standards.

Know your budgets when looking for a property and be sure to remember which fees an agent can and cannot charge you for.

Be sure to download and keep a copy of the Government’s “Guidance for Tenants” document.

This is a much more detailed look into what is, and isn’t, allowed with the ban.

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