Legislation that affects tenants

The Tenant Fees Act 2019 (England)

From 1st June 2019 Fees which have been traditionally been payable by Applicants/Tenants are banned.  There are still some payments required in connection with a Tenancy and these are;

  1. Rent
  2. Refundable tenancy deposit
  3. Refundable holding deposit (subject to terms)*
  4. Payments to change the tenancy when requested by a Tenant
  5. Payments associated with the early termination of the tenant when requested by a Tenant
  6. Utility payments, eg; gas/electric, council tax, water, communication services, TV Licence
  7. Late payment of rent
  8. Replacement of lost keys/security devices
*A Holding Deposit will be payable in order to “reserve” the property you have chosen to rent, this is capped at no more than equal to 1 weeks rent and is subject to criteria and terms.

Do I need to pay a holding deposit? 

Whilst there are now no upfront tenant fees, each tenancy is subject to a holding deposit, payable when you apply for a property. Find out more here.

Holding deposit explained

The Renting Homes (Fees etc) (Wales) Act 2019

Sections 2 and 3 of the Renting Homes (Fees Etc.) (Wales) Act 2019 (“the Act”) create offences for a landlord or agent to require a person to make a payment which is prohibited, or to enter into a contract for services, or to require the grant of a loan in consideration of the grant, renewal or continuance of a standard occupation contract, or pursuant to a term of a standard occupation contract from 1st September 2019.

What does this mean?

  1. Any payment a contract holder is required to pay, unless permitted by the Act, is banned and is a "prohibited payment". This is referred to in this guidance as "the ban".
  2. Landlords and agents cant require the grant of a loan to them, or require a person to enter into a contract for services with them as a condition of a tenancy.

The only payments that landlord's or letting agent's can charge to tenants in relation to new contracts are:

  • Rent
  • A refundable tenancy deposit
  • A refundable holding deposit (to reserve a property) capped at no more that 1 week's rent
  • Payments in respect to utilities, communication servicesm TV licence and Council Tax
  • A default fee where required under a occupation contract

How does a holding deposit affect me in Wales?

Whilst there are now no upfront contract holder fees, each holder is subject to a holding deposit, payable when you apply for a property. Find out more here.

Holding deposit explained

The Fifth Money Laundering Directive (5MLD)

On the 10th January 2020 5MLD will take effect in the UK. 5MLD makes changes to the previous UK regulations and will now bring letting agents into the scope of the Money Laundering Regulations for the first time. This means that letting agents will be required to assess certain tenancy agreements for their potential to be used as a mechanism for the proceeds of crime.

All tenancy agreements with a rent in excess of €10,000 per calendar month will now form part of the regulations. This means that lettings agents will be required to carry out “Know Your Customer” checks on landlords and tenants. “Know Your Customer” requires the checking of identification documents and confirmation of residency status, as well as verification that the tenancy is genuine and not set up to assist either the landlord or tenant to launder the proceeds of crime. Tenancies that fall within the scope of the regulations will require on-going monitoring to check that the initial conclusions regarding the money-laundering risk assessment remain unchanged throughout the whole term of the business relationship. Landlords and tenants who fall into this category of tenancy should therefore prepare themselves for additional questions and administration requirements.

More information on the Fifth Money Laundering Directive can be found on the .GOV website here.