The government has introduced a ban on tenant fees from the 01st June 2019.
This ban applies to both Landlords and Letting agents in England.
So what exactly does this mean for you?
The new legislation will mean that tenants can only be charged for the following items, if relevant to their tenancy:
> A refundable holding deposit - in order to reserve the property. This amount will be a maximum of one week's rental amount, and may be offset against the rental payment.
> 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 can be taken.
> Utility Payments - Payments in respect of utilities, communication services, TV licence and council tax
> Late Payment of Rent - Payment of interest for the late payment of rent at a rate of: 3% over the Bank of England Base Rate calculated from the date the payment was due up until the date payment is received
> Payments for early termination - payments associated with early termination of the tenancy, when requested by the tenant, capped at the Landlord’s loss and the agent’s reasonably incurred costs.
> Other permitted payments - Any other permitted payments, not included above, for breaches of contract or under the relevant legislation including contractual damages. These may include reasonable costs or losses incurred for loss of keys, security devices and changes to the tenancy agreement, if the Landlord agrees they can be made, up to the permitted limits.
If any of these charges apply, they must be fair and considered to be reasonable amounts for the work required.
When does it apply
For new Tenancies from the 01st June 2019, for any renewals of tenancies after the 01st June 2019, and for all running tenancies after the 01st June 2020.
It is important to know that if you are in an existing tenancy, this will not come under the scope of the ban until 01st June 2020. This means that up until this date, unless you renew the tenancy and create a new fixed term tenancy, then any fees that were originally part of your tenancy agreement can still be charged.
We are not required to return the extra week’s deposit for periodic tenancies still running that were entered into before 01st June 2019 until renewal or termination.
We're always happy to answer any questions for you on any aspect of renting a property, so feel free to get in touch!