Ban on Lettings Fees to commence June 1st

by Property 118

8:51 AM, 16th January 2019
About 7 months ago

Ban on Lettings Fees to commence June 1st

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Ban on Lettings Fees to commence June 1st

The Tenants Fees Bill 2017 – 2019, click here, has been confirmed by government to commence on June 1st this year. Bill sponsor Lord Bourne of Aberystwyth (image right) announced the start date at the third reading in the House of Lords and said:

“It has been clear throughout that this is a Bill that will introduce important changes for the private rented sector. It is in all our interest to introduce this introduction as soon as possible.

“Implementation is subject to the parliamentary timetables and amendments need to be considered in the other place. We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on June 1st 2019.

This would mean the ban on lettings fees would apply to all tenancies signed after this date.

Agents and landlords will only be able to collect rent and deposits from tenants with the exceptions of fees for:

  • A change or early termination of a tenancy when requested by the tenant
  • Utilities, communication services and Council Tax
  • Payments arising from Default fees limited to charges for replacement keys or a respective security device, and late rent payments only

Lord Bourne also confirmed that although landlords can charge for damages any amount recouped from a tenant can only put them back in the same position they were previously.

David Cox, Chief Executive, ARLA Propertymark stated:

“This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation, we encourage agents to come to our Regional Meetings over the next few weeks and of course our annual Conference, where ARLA Propertymark will be doing everything it can to help agents plan and prepare for the introduction of the Bill.”

James Davis, CEO of Upad and himself a portfolio landlord, comments:

“Having a firm date set for the Tenant Fee Ban to come in to effect feels like it’s been a very long time coming. However, now we know and it’s a little under 5 months away. This means that any landlord who has taken the ‘bury head in sand’ approach thus far, needs to act quickly.

“Ever since the ban was first announced in November 2016, headlines have focused on the threat that rents will rise, putting additional pressure on tenants and continuing to paint the landlord as the ‘bad guy’. This doesn’t need to be the case though. Most private landlords don’t, in fact, charge excessive upfront costs and whilst it would have been advisable to plan ahead before now, there’s still time to consider how else they can manage their costs.”



Comments

David Price

9:22 AM, 16th January 2019
About 7 months ago

I have never charged tenants any fees but now I will incorporate a late payment fee into my tenancy agreements.

NW Landlord

9:25 AM, 16th January 2019
About 7 months ago

I actively advertise NO FEES and get loads of business on the back of it and am always full this won’t afffect me what so ever.

Luke P

9:36 AM, 16th January 2019
About 7 months ago

As an agent, 20 years ago I was merely a middleman collecting rent and passing it on to landlords. Since then, there has been a helluva lot of regulatory change and most of my landlords are completely ignorant to it. The additional costs incurred over the years has been passed to the tenant in the form of an administration fee. This will now have to be directly passed to the owners. They ain't gonna like it, especially as payment for credit checks/references/my time will not necessarily translate into a successful tenancy...there's nothing now to stop down-and-out chancers 'having a go' at trying to secure a rental with no consequence or loss. My time still has to be paid for.

I hope there are some solicitors amongst my landlords who will get a very swift lesson in other peoples' time being valuable too!

Ross Tulloch

9:45 AM, 16th January 2019
About 7 months ago

We charge no upfront fees, but if the tenant leaves between 6 months and a year (there is a six month break) we charge £200. will this be ok?

Ian Narbeth

10:30 AM, 16th January 2019
About 7 months ago

Reply to the comment left by Ross Tulloch at 16/01/2019 - 09:45
Hi Ross
Charging a fee to allow early termination is not caught by the Act so you are OK to do so. Many landlords charge a sum equivalent to 2 weeks rent as a break cost.

Ross Tulloch

10:44 AM, 16th January 2019
About 7 months ago

Reply to the comment left by Ian Narbeth at 16/01/2019 - 10:30
Thank you, but with a break clause at six months, there is technically no early termination??

Ian Narbeth

11:12 AM, 16th January 2019
About 7 months ago

Reply to the comment left by Ross Tulloch at 16/01/2019 - 10:44
I assumed your tenancy was for more than six months, e.g. twelve months but you allowed the tenant to leave early subject to paying £200. Please clarify.

Ross Tulloch

11:15 AM, 16th January 2019
About 7 months ago

Apologies. No. 12 months but with a break clause at six months, so with notice they can leave after 6 months. Because it is a lot of work if someone leaves earlier than 12, we charge the £200. No charge of course after the 12 months

Yvonne Francis

11:21 AM, 16th January 2019
About 7 months ago

Reply to the comment left by NW Landlord at 16/01/2019 - 09:25
But this will affect you as advertising 'NO FEES' will be irrelevant so you will have lost this edge over agents or any landlord who may charge them. I'm in the same position and I am hoping that advertising as a self managing landlord may be some compensation.

NW Landlord

11:24 AM, 16th January 2019
About 7 months ago

Reply to the comment left by Yvonne Francis at 16/01/2019 - 11:21
Hi most tenants won’t have a clue anyway most don’t even know what the DPS is

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