That’s it! No More Fees for Tenants
June 1st saw the end of the transition period following on from the introduction of the Tenant Fees Act 2019 (TFA 2019).
The TFA 2019 was introduced into law in order to regulate and better protect tenants in England from high fees on entry and ongoing in their tenancies. Tenants will be able to see what a given property will cost them in the advertised rent with no hidden costs or fees.
What Was The Problem?
Before the introduction of the TFA 2019, tenants were faced with a host of fees when applying for and living in rental accomodation in England. Landlords and letting agents were able to charge a list of fees to a tenant such as:
● Admin Fees
● Reference Fees
● Credit Checks
● Renewal Fees
● Check-out Fees
● Uncapped deposits
● Uncapped late rent/arrears interest
This previously meant that tenants could be charged hundreds of pounds before even moving into a property. These fees would be charged alongside the tenants first months rent upfront and a deposit to be paid to the landlord or his/her agent. Furthermore, before the TFA 2019 a tenancy deposit could be determined by the landlord or his/her agent; an industry standard would be the equivalent of 6 weeks rent.
Introducing The Tenant Fees Act
So, what did the TFA 2019 change for landlords and agents?
As of June 1st 2019, landlords and agents could not charge any new tenants any fees! Furthermore, holding deposits, typically paid to reserve a property, are now regulated and capped at the equivalent of 1 weeks rent with strict time frames to act within. Security deposits, held for the duration of the tenancy, are now capped at the equivalent of 5 weeks rent (unless the annual rent exceeds £50,000, where the cap is increased to 6 weeks rent).
However, there are 3 exceptions to fees that are deemed acceptable under the TFA 2019; but they are now capped. These 3 exceptions are:
1. Changes To The Tenancy
Landlords/Agents can still charge for a change to the tenancy mid tenancy as requested by the tenant. Common examples of changes are adding another tenant and/or pets. This fee is capped at £50 unless you can prove a greater cost is incurred by the change. This is not to be used for changes to the length of the tenancy or as a renewal fee!
2. Late Rent Payments/Arrears
Rent arrears and late payments are now regulated so that landlords/agents can only charge for rent that is over 2 weeks late. These fees can be up to 3% above the Bank of England base rate. Keep in mind, that as this is an annual interest rate, you will have to calculate the amount of pro rate interest incurred by the tenant.
3. Lost Keys
You will still be able to charge for replacing and attending a property for lost keys. But this is only up to a reasonable amount where you can prove your costs.
The Transition Is Over
Since the TFA 2019 was introduced and enforceable from June 1 2019, these only applied to tenancies signed on or after that date, meaning tenancies already on going where still liable to the fees agreed to. Any renewals after that are considered new tenancies and were therefore subject to the TFA 2019.
From 1st June 2020, the act will now be fully enforced on all tenancies regardless of their status or start date! This means no fees for tenants unless they fall under the exemption.
It is worth noting, that If a landlord/agent currently holds a deposit which exceeds the 5 week cap where the tenancy began before 1 June 2019 and is now periodic, you do not have to return the excess. However, if a new tenancy is formed, this will be subject to the restrictions and caps of the TFA 2019.
If you want to ask more questions about our services and fees (which will surprise you), you can email us firstname.lastname@example.org or call us directly at 0207 117 2879 and we’ll be happy to share more information with you!