The controversial Renters’ Rights Bill, which wants to sharply reduce the ability of letting agents to levy charges on tenants and instead shift them to landlords, has made further progress in the House of Lords.
It underwent the committee stage on Friday of last week and now goes to the so-called Report Stage on a date to be announced.
In the committee stage last week, the proposer of the Bill - Liberal Democrat peer Baroness Grender - amended her own proposed legislation because, in her words, the terminology used in the original, specifying a ban on charges to tenants for reference checks, credit checks, administration fees and inventory fees, “would leave too many options for newly named fees to be charged”.
Rather than specifying named fees to be banned, the amended Bill now “bans all fees to the tenant from the lettings agency and specifies that charging a fee to a tenant would be an offence” the Baroness told the Lords.
There remains a sub-section in the proposal which would allow the Secretary of State for Communities and Local Government to make an exemption so that if evidence emerges of services in respect of which there is value to the tenant in charging a particular fee, this can be done.
However, Grender told the peers: “I do not anticipate any such fees but my new amendment allows for the possibility, if concrete evidence was indeed found that a fee for a specific service would be in the best interest of the tenant in some way.”
Although there was general support from Grender amongst the Lords present, not everyone agreed with every element.
Baroness Gardner of Parkes, a Conservative peer, said: “If the noble Baroness, Lady Grender, believes that people will simply reduce their rents, it is unrealistic. When she talks about how much rents have gone up, that is nothing compared to how much property has gone up.”
Referring to other measures in Grender’s Bill - such as the mandatory registration of landlords and limits on the size of deposits, and an automatic ban for any agent or landlord named on a ‘rogue operator’ database from being granted an HMO licence - Baroness Gardner said: “I thoroughly approve of the idea that you should have access to a register of rogue landlords and all that, but it is unrealistic to imagine that this list of things which the noble Baroness has set out in detail will suddenly become inexpensive or vanish.”
Towards the end of the debate Baroness Grender said: “There are good lettings agents out there who are members of government-accredited redress schemes and pursue best practice. They should continue to charge a fee for the work that they do but the fee should be from the landlord, who can shop around and choose which lettings agency to use. Landlords can decide to use the decent, regulated ones.”
The debate comes back to the Lords for its Report Stage, probably early next year.
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Seems like yet another 'tax' on landlords to me.
We all know how the cycle works when someone has to get paid:
Tenant fees banned > Cost passed to landlord > rents go up to cover losses > tenants lose out even more.
Rinse and repeat.
Thinking this through if agents are unable to credit check prospective tenants who then go on to default on rent the speed at which the legal system works needs to be fast tracked. It takes months to get tenants to court with no rent in the meantime and this would be down to our elected dictatorship commonly known as government.
So once again I ask who will start the bad tenant list?
So can anyone tell me whether the new legislation would stop a Landlord from charging a fee and getting a credit check - and then instructing the Managing Agent whether to go ahead or not with the tenant?
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