Tenant Fees Act 2019 – Landlords & Letting Agents be Warned

On 12 February 2019, the Tenant Fees Bill received Royal Assent and comes into effect on the 1 June 2019

The Act prevents landlord and letting agents from charging certain fee to tenants and prospective tenants of assured short-hold tenancies and student accommodation in England Wales. For security deposits, if the annual rent is less than £50,000, the deposit will be capped at five weeks rent.

It is quite common for tenants to have to find large amounts of cash when they first move into a property under an assured short-hold tenancy agreement. Tenants are often required to pay a minimum of one months’ deposit and the one months’ rent in advance. In addition, letting agents often charge a holding deposit or ask tenants to be responsible for the costs of undertaking various checks on the tenants. The Act aims to stop unnecessary, costly fees being imposed on tenants and unreasonable deposits being requested depriving tenants of much needed cash.

More benefits for tenants

The Act also includes a number of other measures to assist tenants:

• Proposed requirements on landlord and agents for returning a holding deposit to a tenant;
• Capping the amount that can be charged for a change to a tenancy at £50 unless the landlord demonstrates that greater costs were incurred;
• Creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution.
• Requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees

The relevant provisions will initially apply to all new and renewal tenancies (excluding periodic tenancies) However, after one year, they will apply to existing tenancies and licences.

To speak with Shilpa Mathuradas or another member of our Property litigation and Housing team contact us by calling on 0207 485 8811 or fill in an online enquiry form.