Published: 02/06/2020
Tenant Fees Act 2019 applies to all tenancies.As members of the Association of Residential Letting Agents (ARLA), we are regularly updated with what is happening across the market in the UK's private rental sector.
The Tenants Fee Act of 2019 came into force on June 1st, 2019. With very few exceptions, this Act prohibits the charging of fees to tenants, and there is also now a cap on deposits.
The fees ban applies to all rentals, new and renewed, fixed term and periodic, regardless of the commencement date of the tenancy.
The exceptions include long leases, non-housing Act tenancies (contractual), social housing tenants, company lets, and licensed holiday occupations.
Breaching these regulations makes landlords and the letting agent liable for hefty fines of up to £5,000 for the first breach and £30,000 for each additional violation.
Key points of the Tenant Fees Act 2019
Permitted payments
Payments/fees are now prohibited unless expressly allowed by The Tenant Fees Act. Landlords and their letting agents can't ask their tenants to make a payment for granting or renewing a tenancy or make any other charges except:
- Rent
- A capped, refundable Tenancy Deposit
- A capped, refundable Holding Deposit
- Payments in the event of a default
- Payment on assignment, variation, or novation of a tenancy
- Payment on termination (surrender) of a tenancy
- Payments of Council Tax
- Payments for utilities (electricity, gas, water)
- Fees for a TV license
- Communication services (e.g., telephone line)
- Internet, cable, or satellite TV
- Green Deal charge
Listed below are charges to tenants that are not permitted under the terms of the Act.
- Application fees
- Tenancy set up costs (tenancy agreement fees, Tenancy Deposit Scheme fees, etc.)
- Tenant referencing
- Contract negotiation
- Inventory check-in and check-out fees
- Card payment fees
- Professional cleaning
- Landlords cannot charge higher rent in any period, say for the first or any other month, to recover any of these costs.
Tenants are responsible for returning the property in the same condition they found it, apart from the usual wear and tear. This is why an inventory at the start and end of a tenancy is essential. Landlords can only charge for having the property cleaned to a 'professional standard' at the end of a tenancy if it was at the start.
Security deposits
Deposits are capped at five weeks' rent, but it goes up to six weeks' rent if the rent is over £50,000. One deposit is allowed on one property and on renewals. Further deposits for students and/or pets are not permitted.
Holding deposits
One week's rent only can be taken as the holding deposit. It can only be retained if the applicant withdraws if the tenant fails a 'Right to Rent' check, provides false or misleading information or fails to take all reasonable steps to enter into a tenancy agreement within 15 days.
For more information about the new regulations, visit
https://www.gov.uk/government/collections/tenant-fees-act
Circa London is an independent central London Sales and Lettings agency. If you are looking to buy, sell, let or rent property in London, please call us.
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered as financial or investment advice. Investing in real estate involves risks, and it is essential to conduct thorough research and seek professional guidance before making any investment decisions.
