Fees Ban: new guidance notes for agents, tenants and landlords

The government has issued new guidance notes on the Tenant Fees Act, aimed at agents, landlords and tenants.

The publications come ahead of today’s conference of the Association of Residential Letting Agents, and of course the introduction of the ban itself on June 1.

From that date new tenancies cannot have fees applied; however, on existing contracts fees can still be charged fees until June 1 2020 after which all tenancies are subject to the new law.

The government says the Act aims “to reduce the costs that tenants can face at the outset, and throughout, a tenancy, and is part of a wider package of measures aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, good quality and more affordable private rented sector.”

The guidance for agents does not contain any startling new proposals but reiterates the key elements of the Act, namely that agents cannot require a tenant (or anyone acting on their behalf or guaranteeing their rent) to make certain payments in connection with a tenancy. Nor can an agent require them to enter a contract with a third party or make a loan in connection with a tenancy.

The only fees that can be charged are:

I- the rent;

- a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above;

- a refundable holding deposit (to reserve a property) capped at no more than one week’s rent;

- payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher;

- payments associated with early termination of the tenancy, when requested by the tenant;

- payments in respect of utilities, communication services, TV licence and council tax; and

- a default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement.

The guidance also reiterates that policing of the ban will partly be conducted by Citizens Advice.

It says: “If the fee you are charging is not on this list, it is a prohibited payment and you should not charge it. A prohibited payment is a payment outlawed under the ban. If you are uncertain as to whether a charge is permitted, you should consider contacting Citizens Advice or obtaining legal advice. You could contact your local trading standards authority or the lead enforcement authority.”

The guidance also says: “You cannot evict a tenant using the section 21 eviction procedure until you have repaid any unlawfully charged fees or returned an unlawfully retained holding deposit. All other rules around the application of the section 21 evictions procedure will continue to apply.”

You can see the full 59 page guidance for agents here.