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

Tony Martin

15:19 PM, 23rd January 2019
About 7 months ago

Does that mean that a tenant will no longer be responsible for the check-out and professional cleaning costs when moving out?

Arnie Newington

23:59 PM, 23rd January 2019
About 7 months ago

Reply to the comment left by Tony Martin at 23/01/2019 - 15:19
That’s my understanding cleaning charges are to be banned.

Larry Sweeney

8:46 AM, 24th January 2019
About 7 months ago

Reply to Wanda. You are absolutely correct. This is terrible legislation. The Alliance ,as a new body can only take on so many battles. Shame on the Useless organisations who once again allowed more draconian bullshit to be heaped upon the industry. Yet again it proves how useless membership of these organisations is. We are studying the legislation carefully. We may if appropiate devise a strategy to deal with this. If such a strategy is possible we will promote it on the internal member section of our website. Existing members will already be familiar with our strategy for dealing with Council licensing. We do not make this public. There is more than one way of skinning the proverbial cat.
In the Meantime, to the thousands of readers who have not joined us yet, please do so.
http://Www.landlordsalliance.co.uk

Ian Narbeth

12:55 PM, 28th January 2019
About 7 months ago

Reply to the comment left by Tony Martin at 23/01/2019 - 15:19
Tenants will still be liable for DEFAULT. However, you will not be able to charge a fixed fee for inventory and check out regardless of default. In other words, if there is no damage or breakages, no charge can be made on check out. Landlords or agents will have to absorb the cost of attending.

Rob Crawford

14:55 PM, 1st February 2019
About 7 months ago

Reply to the comment left by Arnie Newington at 23/01/2019 - 23:59
My understanding is that cleaning fees can still be deducted from the deposit at the end of the tenancy if the property is left in a unclean condition when compared to the inventory check as this would be a default from the AST terms.

Steve Masters

10:26 AM, 7th February 2019
About 7 months ago

Reply to the comment left by Ian Cognito at 23/01/2019 - 10:26
Ian Cognito raises an interesting and important point that I don't think anyone has picked up on.
Can a fee be charged if the landlord offers the tenant a no fee alternative?
In Ian's example a fee can be charged for referencing or, as an alternative, the tenant can supply their own references.
My example: Tenant can fix or replace something they broke themselves at their cost or, as an alternative, the landlord can fix or replace and charge the tenant. If tenant doesn't like the landlords quote then they can get their own quote.
Obviously there is an issue of enforcing the quality of tenants own alternatives. But what I would like to establish first is the legal principle here.

FOX30

12:39 PM, 8th February 2019
About 7 months ago

HI MARK, hope your well, I have been thinking about this situation for a while now as we draw closer to the 01/06/19. The RLA tell me that under my terms in my AST's we have a clause where the tenants have to agree to pay for a pro clean and a checkout inventory post tenancy, we pay for the check in usually and this is deducted from their security deposit and the rest refunded to them unless there is more damage which is not deemed W & T. However the RLA have told me that I will not be able to do this post 01/06/19 as these are deemed as fees. This has created a dilemma for me and now I have to reconsider what I need to do. Firstly will all my AST's which have been signed before the 01/06/19 and some date back to 2017 become voided due to the new legislation with regard to these two fees and if so, can I apply the same idea you have suggested above to NO DEPOSIT TAKEN, and run them through the insurance company and pass on the risk to the insurer, does the insurance company block protect on an annual policy for all our properties and if they do including Rent Guarantee and insurance and if so how easy is it to make a claim if the tenants leave the property with repairs to be made even slight repairs which fall out of W&T, I usually deduct for any damage from the security deposits, is there a policy excess etc and how would a pro clean fit into the equation to the insurer, as 9 times out of 10 the tenants never leave the property in the cleaning condition it was first presented in ?
What do you think ?

SimonR

15:59 PM, 15th February 2019
About 6 months ago

Reply to the comment left by Ross Tulloch at 16/01/2019 - 11:15
Ross I would be surprised if you could continue to charge that as you have given the tenant the opportunity to leave after 6 months with the break clause and if I was one of you tenants I would tell you to poke it as I would have acted with in the terms of the contract.

SimonR

16:11 PM, 15th February 2019
About 6 months ago

Reply to the comment left by Tony Martin at 23/01/2019 - 15:19
No you can still make a deduction from the deposit if the property hasn't been cleaned you just wont be able to stipulate they have to get professionally cleaned however you can inply it "This property has been cleaned for this tenancy - professionally" you are not say it must but has been so implying it must.

moneymanager

20:40 PM, 19th February 2019
About 6 months ago

Tenant Fees Act 2019
2019 c. 4 SCHEDULE 1
SCHEDULE 1 Permitted payments
"A payment of damages for breach of a tenancy agreement or an agreement between a letting agent and a relevant person is a permitted payment."

From the RLA

"Examples of banned fees then would be:

Charging for a guarantor form
Credit checks
Inventories
* Cleaning services
Referencing
* Professional cleaning
* Having the property de-flead as a condition of allowing pets in the property
Admin charges
Requirements to have specific insurance providers
* Gardening services

Q If the items *'d above are stipulated in the tenancy agreeement (or presumably a contemporaneously supplied and cross-referrenced addendum) of tenancy tenant actions "to restore to the condition at entry" are not carried out that constitutes a default and thus become chargeable?

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