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

simon cheeseman

16:24 PM, 16th January 2019
About 7 months ago

Reply to the comment left by Luke P at 16/01/2019 - 09:36
Is this not an opportunity for the bigger referencing agencies to offer a pre approval referencing service where Landlords can stipulate that only applicants who have passed referencing with a recognised credit check/referencing agency will be considered ?? we have recently gone down the Open Rent route to get the zoopla/right move coverage, referencing is currently £20 which we make the applicant pay, from June we will certainly have to be more scrupulous with our short listing its not the £20 its the days lost in rent waiting for the approval only to find out you have been told a pack of lies then back to doing more viewings to possibly get the same problem again !! Another shot in the foot for Landlords " well done Lord Bourne i hope you have a lot of rentals and your silver spoon gets stuck in your throat !!! "

Luke P

16:46 PM, 16th January 2019
About 7 months ago

Reply to the comment left by simon cheeseman at 16/01/2019 - 16:24It’s not allowed. No pre-conditions to a tenancy other than a week’s holding deposit (refundable upon successful tenancy, I believe), five weeks deposit and first payment of rent. Otherwise I’d make it a condition to get one of my LL mates’ references at £150 a go and I’d do the same for him.

You’ll be paying the £20, I’m afraid, as it’s a ‘prohibited payment’. Have a read…

https://publications.parliament.uk/pa/bills/lbill/2017-2019/0152/lbill_2017-20190152_en_2.htm#pb1-l1g1

Gromit

18:38 PM, 16th January 2019
About 7 months ago

Some Landlords I've spoken to are concerned about the restriction of Deposits to 5 weeks rent. Particularly as its not uncommon for Tenants to not pay the last months rent and for it to be taken out of the Deposit.

Can anyone better acquainted with the detail of the legislation advise if taking the "last months rent" at the outset of a tenancy is prohibited?

Yvonne Francis

19:23 PM, 16th January 2019
About 7 months ago

Reply to the comment left by NW Landlord at 16/01/2019 - 11:24
Well well well!! mine do. I'm sure too that mine would soon know about fees. It's just you would look a bit of a blocker trying to continue to capitalise on 'NO FEES'.

Monty Bodkin

19:38 PM, 16th January 2019
About 7 months ago

Reply to the comment left by Luke P at 16/01/2019 - 16:46
No pre-conditions to a tenancy

Sorry Luke, that's not correct.

Nothing to stop a landlord asking a tenant to prove as a pre condition why they should be granted a tenancy.

Luke P

19:43 PM, 16th January 2019
About 7 months ago

Reply to the comment left by Monty Bodkin at 16/01/2019 - 19:38I meant monetarily speaking. You cannot make them pay anything except what I previously mentioned.

Monty Bodkin

19:45 PM, 16th January 2019
About 7 months ago

This should have been a very low cap on fees, not a complete ban.
Stupid legislation for political gain.

Monty Bodkin

19:57 PM, 16th January 2019
About 7 months ago

Reply to the comment left by Luke P at 16/01/2019 - 19:43I meant monetarily speaking.
Yes I know, sorry for being pedantic.

It needed clarifying.

Quality landlords will now require bank statements, Experian credit report, family history and last 3 school reports before even giving a potential tenant a viewing.

A *complete* ban on rip-off fees was an understandable knee jerk reaction, but will unfortunately be bollocks in practice.

wanda wang

22:29 PM, 16th January 2019
About 7 months ago

Reply to the comment left by Ian Narbeth at 16/01/2019 - 11:12
without charging credit check, reference fee, so the landlord has to pay it itself, if one failed, then you have to pay for another, how does this make sense?

Luke P

8:40 AM, 17th January 2019
About 7 months ago

Reply to the comment left by wanda wang at 16/01/2019 - 22:29
That’s precisely how it is, Wanda. I will be charging my LLs for my time and there is no guarantee a successful applicant will emerge. There is now nothing to stop a bankrupt trying their luck at several agents at the same time to see if they get lucky.

Nobody was vocal enough at the time of this proposal.

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