The Tenant Fees Ban comes into force on 1st June 2019, so it is vital landlords accept change is coming. The legislation has been introduced to make renting fairer for tenants, and the focus falls on fees charged at the beginning of the tenancy. However, the Bill will also cover check-out fees, renewal fees and deposits.

There will be some areas where landlords can charge fees, mainly where they have incurred a cost. An example of this would be where the tenant has lost a set of keys, and the landlord has replaced them. However, landlords will only be able to charge the cost of replacing these issues, and landlords are advised to obtain and retain a receipt.

Other aspects where the landlord can charge fees include:

·        The tenant requests a change of tenancy

·        The tenants demand the rental period ends early

·        Where the tenant misses a rent payment

·        Utilities

Landlords will no longer be able to charge for most administration fees

Previously, a landlord could charge for inventory checks, references and credit checks. These are all vital components of the letting process. However, as the landlord cannot charge for these services, they will be required to absorb the full cost themselves.

Understandably, many landlords are not pleased with this change, and landlords will have to review their finances.

Holding deposits are changing too

The cap for holding deposits is one week’s rent, and there will be stricter regulation regarding repayment if the tenancy doesn’t take place.

When a landlord has collected the holding deposit, they have 15 days to decide whether they wish to accept the tenancy application

If the landlord rejects the application, the deposit must be paid back to the tenant within seven days

If the tenancy doesn’t proceed because the tenant backs out or the tenant has failed to provide adequate information to assist the landlord in deciding if the tenant should let the property, the landlord doesn't have to pay back the full amount

If the tenancy proceeds, the holding deposit should be returned to the tenant, in total, within seven days of the tenancy beginning, or the deposit is set aside as part-payment of deposit or rent

Be wary of changes to the security deposit levels

The Tenant Fees Bill caps the deposit at five weeks of rent when annual rent is less than £50,000 or six weeks of rent when annual rent is equal to or greater than £50,000. The landlord is required to place the deposit into a deposit protection scheme.

If a landlord charges an illegal fee, they could receive a fine of up to £5,000 for a first-offence from Trading Standards. If the landlord charges an additional illegal fee within five years of their first offence, they can be prosecuted and be forced to pay a fine of up to £30,000. In some cases, landlords may be subject to a banning order, following Section 14 of the Housing Act 2016.

If you are a landlord who is concerned about the Tenant Fees Ban, come and speak with Hunters Forest Hill. We are pleased to say we help many local landlords in areas like New Cross, Peckham, Dulwich and Brockley, in addition to Forest Hill, so if you need reliable support from a local agent, please get in touch.