You are here: Tenant Fees Act 2019 for England

Tenant Fees Act 2019 for England

The new Tenant Fees Act came into force on 1st June 2019 effectively banning agents and landlords from charging a tenant fees other than rent, tenancy deposit and holding deposit. While this may seem straight forward, the legislation has far reaching consequences for agents, landlords and ultimately the tenants whom it was designed to protect in the first place.

The Act affects assured shorthold tenancies (ASTs), licences and student lets which have been provided by the associated college.

Tenant Fees Act 2019
Tenant Fees Act 2019

What can Tenants be charged for under the Tenant Fees Act 2019 before they move in?

Before a tenant moves in landlords or agents can charge up to one week’s rent as a holding deposit.

What is a holding deposit?

A holding deposit or holding fee is a sum of money the tenant pays the landlord or the agent to secure the property they wish to let whilst referencing, admin and contracts are completed. Usually this is deducted from the security deposit or the first month’s rent if the tenancy goes ahead alternatively it must be given back to the tenant within 7 days of the agreement being signed or the landlord withdrawing from the proposed agreement or the deadline for signing the agreement has passed with no tenancy agreement in place.

How long do Agents or Landlords have to enter into the agreement once the holding deposit is paid?

Unless there is a written agreement between both parties with a different deadline date, once the holding deposit is received by the landlord or the agent, they only have 15 days to enter into a tenancy agreement with the tenant. This means that either on or before the deadline date of 15 days upon receipt of the holding deposit or a the different agreed deadline date, contracts must be signed and the first month’s rent paid and security deposit paid.

When can a holding deposit be kept by the Landlord?

There are a few circumstances when the landlord is not required to return the holding deposit to the tenant. These are; if the tenants decides to withdraw, if the tenant fails Right to Rent checks, if the tenant provides false or misleading information which affects the landlord’s decision to let the property to them.

Can Tenant Fees be charged?

Landlords and letting agents can no longer charge tenants for ‘tenant fees’. The term  ‘Tenant fees’ covers a whole raft of associated rental costs such as agency fees, admin fees, check-in fees, inventory fees for check-in and check-out and referencing fees.

What is the maximum security deposit?

Landlord’s and agents can ask for a security deposit, inclusive of deposit for pet damage, to the value of up to a maximum 5 weeks rent. The landlord or agent must ensure this money is kept in a government-authorised deposit protection scheme. For annual rents over £50,000 this deposit can be increased to 6 weeks. The security deposit is sometimes called a tenancy cash deposit.

What can Tenants be charged for after they move in?

Tents must pay the rent that was agreed in the contract. If a tenant moves out and they find someone else to take on the tenancy or if the tenant wishes to make any changes to the agreement they can only be asked for a maximum of £50 for the associated work and admin involved in making those changes.

Tenants pay for utilities, TV licence, council tax, broad band and other communications unless otherwise agreed in the contract.

If the tenant terminates the contract early they can be charged any payment as outlined in the contract for early termination.

Any security items associated with the property such as keys, alarm keys and locks can be fairly charged.

If rent is over 14 days late, tenants can be charged 3% of the rent due.

What happens if Landlords don’t comply?

Consequences of failing to adhere to the new rules can be severe. The first offence is a fine of up to £5000 and up to £30,000 if another offence is committed within five years of the first offence along with a criminal record and a banning order.

Further help and guidance

For suppliers providing a rent review service click here

To find a letting agent covering your area click on the link below and select ‘letting agent’ on the form click here

Government guidance for landlords and agents

Government guidance for tenants