Official government guidance for tenant fees ban released
The Ministry of Housing, Communities & Local Government have released their official guidance notes for landlords, letting agents and local authority enforcement officers explaining how the Tenant Fees Act 2019 affects what is now allowed to be charged from the 1st of June.
Click here to view the full guidance document.
You cannot evict a tenant using the section 21 eviction procedure until you have repaid any unlawfully charged fees or returned an unlawfully retained holding deposit. All other rules around the application of the section 21 evictions procedure will continue to apply.
This guidance applies to England only.
“What fees can I ask a tenant to pay?
You cannot require a tenant (or anyone acting on their behalf or guaranteeing their rent) to make certain payments in connection with a tenancy. You cannot require them to enter a contract with a third party or make a loan in connection with a tenancy.
The only payments you can charge in connection with a tenancy are:
- The rent
- A refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit (to reserve a property) capped at no more than one week’s rent
- Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
- Payments associated with early termination of the tenancy, when requested by the tenant
- Payments in respect of utilities, communication services, TV licence and council tax; and
- A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement
If the fee you are charging is not on this list, it is a prohibited payment and you should not charge it. A prohibited payment is a payment outlawed under the ban.
What does this mean for existing tenancy agreements?
If a tenancy agreement was entered before 1 June 2019, you can continue to require a tenant to pay fees written into that agreement (e.g. check-out or renewal fees) until 31 May 2020.
After 1 June 2020, the term requiring that payment will no longer be binding. Should you, in error, ask a tenant to make such a payment, you should return the payment immediately and must return this within 28 days. If you do not return the payment within 28 days, you will be treated for the purposes of the Act as having required the tenant to make a prohibited payment (a payment that is outlawed under the ban).
You do not need to return any amount of tenancy deposit that is over the cap for tenancy agreements that were entered into before the Tenant Fees Act came into force.”
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Member Since July 2015 - Comments: 3
2:18 PM, 6th April 2019, About 7 years ago
In the past, I only charged the fee I had to pay for registering the deposit. So I take it even this will now be illegal to recover from the tenant?
It’s my opinion that the Government’s intention was to massively reduce the PRS thus releasing rental properties back to the market for sale, probably in order to reduce property prices and increase 1st time buyers. Well, It was a good plan in a way since they are achieving just that! Even as a landlord, I can see the logic. We have a choice, either accept what is happening or get out.
The fact that tenants are evicted and now have nowhere to live is just a by-product, which HMG were certainly aware would happen. I am definitely selling up when the current tenants vacate. It will be interesting to see how all this pans out over the next few years.
I heard the news, that of all buyers within the last year, 50% were 1st time buyers, which is great really! Landlords openly complaining about these new regulations is just giving the law-makers and powers-that-be a jolly good laugh. Landlords shouldn’t let ‘them’ see it’s hurting them.
Member Since October 2016 - Comments: 155
9:17 AM, 7th April 2019, About 7 years ago
Reply to the comment left by Marty K at 02/04/2019 – 11:01
I was wondering if you could ask the tenant to provide a credit reference dated in the last 3 months. I recall some tenants already do this to get ahead of the game.
You are not charging the tenant any fees. It’s their credit reference not yours.
I see this as similar to right to rent, you ask for a copy if their passport, but if they don’t have a passport, you would not be expected to pay for them to get one!
Member Since May 2015 - Comments: 2203 - Articles: 2
9:31 AM, 7th April 2019, About 7 years ago
“. . .if they don’t have a passport, you would not be expected to pay for them to get one!”
Give HMG time, they can’t introduce all anti landlord legislation at once.
Member Since June 2014 - Comments: 1564
9:49 AM, 7th April 2019, About 7 years ago
Reply to the comment left by Sue Thorne at 06/04/2019 – 14:18
We have a choice, either accept what is happening or get out.
….or adapt.
I heard the news, that of all buyers within the last year, 50% were 1st time buyers, which is great really!
Not if you are the poorest in society, moving for work, working away from home, a student, loved up wanting to try living together, or one of the 1001 other reasons people rent.
All well and good encouraging 1st time buyers but destroying the private rental sector, without anything to replace it, is rank stupidity.
Member Since February 2016 - Comments: 977 - Articles: 1
1:49 PM, 24th May 2019, About 7 years ago
Looking at the list above I do not see a possibility of deduction from the deposit for damages incurred, cleaning if not done by tenant as per AST and so on. Is that no longer allowed, or it just doesn’t fall into fees category? Thanks!
Member Since July 2013 - Comments: 2002 - Articles: 21
1:54 PM, 24th May 2019, About 7 years ago
Reply to the comment left by Whiteskifreak Surrey at 24/05/2019 – 13:49
Damages for breach of covenant are not prevented by the TFA. However, it is not possible to stipulate a fixed sum for cleaning or to insist on professional cleaning. Suggest you read the official guidance, available online.
Member Since February 2016 - Comments: 977 - Articles: 1
2:00 PM, 24th May 2019, About 7 years ago
Reply to the comment left by Ian Narbeth at 24/05/2019 – 13:54
Thank you Ian, highly appreciated! We self manage and never charged any fees, however rarely we have to deduct for replacement items (chairs, lamps etc). I am still in the office, so not much time to read it now…
Member Since April 2017 - Comments: 163 - Articles: 1
5:50 PM, 24th May 2019, About 7 years ago
If there is a late payment fee for over 7 days late and this is in the contract, of £30, is that is ok?
Member Since March 2015 - Comments: 1969 - Articles: 1
6:09 PM, 24th May 2019, About 7 years ago
Reply to the comment left by Ross Tulloch at 24/05/2019 – 17:50
No.
Member Since July 2013 - Comments: 1434
10:42 PM, 24th May 2019, About 7 years ago
Reply to the comment left by Ross Tulloch at 24/05/2019 – 17:50
Not for agreements signed on or after 1 June 2019, and not for earlier agreements from 1 June 2020.