On 1 June 2019, most tenant fees are banned in new tenancies (including renewals). The act will ban any prohibited fees in all existing tenancies on 1 June 2020.
Does it apply to me?
The ban applies to fees charged by landlords, letting agents and student accommodation providers. It applies if you have an assured shorthold tenancy, lodgers agreement or a license agreement. It does not apply to company lets or non-assured tenancies. Find out what type of agreement you have here.
It will apply if you have a new tenancy or license (including renewals) signed after 1 June 2019. If you are in an existing agreement, it will apply on 1 June 2020, or when you renew, whichever is sooner.
What fees are banned?
Most fees tenants are used to paying - such as inventory fees, referencing fees, additional charges for having a guarantor, admin fees, fees for drawing up a contract, credit checks, are all banned for new tenancies from 1 June 2019.
You may still have to pay a holding deposit, damage deposit, and upfront rent when starting a new tenancy. From 1 June 2019, holding deposits are limited to 1 week's rent, and damage deposits limited to 5 weeks' rent.
What can I still be charged?
You can still be charged upfront fees in new tenancies for the following:
- If you lose your key and need a new one cut. This can only be the landlord or agent's reasonable costs. Any costs they cannot provide evidence for cannot be charged to you.
- If you are more than 14 days late on your rent, you can be charged interest limited to 3% above the Bank of England base rate.
- If you want to swap tenants (assign). The government guidance suggests this should cost £50, but maybe more if the landlord can evidence their costs.
- If you want to end your tenancy early before the fixed term ends or before you can use your break clause if you have one. Your landlord can only charge you their reasonable costs and losses- for example, costs of readvertising, and the rent until they find a new tenant.
Landlords can also charge you costs if you breach the tenancy, but these are to be charged from the deposit when the tenancy ends, which allows you to dispute the charges with your deposit scheme. Or, your landlord will have to take you to court if they want the money before the end of the tenancy.
What if I'm already in a tenancy?
The ban won't apply to existing tenancies until you renew for a new fixed-term, or 1 June 2020 - whichever is sooner.
If your current contract signed before 1 June 2019 states you must pay a renewal fee to renew your tenancy, this is still applicable if you renew before 1 June 2020. However, the landlord won't be able to include further fees in your renewal agreement.
If you renew your tenancy, or on 1 June 2020, any deposit money you have paid that exceeds 5 weeks' rent must be refunded. For example, if you paid £600 deposit and your rent is £100 a week, your landlord or agent must refund £100.
If you leave your tenancy before 1 June 2020, you will still have to pay a check out fee or inventory fee if it is in your contract.
Can't the landlord just charge me more rent?
The Tenant Fees act makes it clear landlords cannot charge more rent for the first few months to cover the fees, for example. But there is no restriction on what landlords can charge for rent for the whole tenancy, so this may increase. We are not expecting huge rent increases however, but it is difficult to say at this time what will happen.
My tenancy starts after 1 June but I've already signed the contract and paid fees. Can I get a refund?
Sadly, no. You cannot be refunded for any fees paid before 1 June, even if you haven't signed yet, and even if your tenancy starts after 1 June. If you've signed an agreement before 1 June, even if the tenancy starts later, none of the bans apply until you renew, or until 1 June 2020.
For more information, see the Guidance for Tenants, published by the government.
If you are eligible for our service, you can book an appointment if you think you've been charged unlawful fees.
This article was originally published on the ULHS website.