Tenant Fees Act – Rent arrears default feesMake Text Bigger
The way I read rent arrears is we can not charge unless it is more than 14 days overdue. Thereafter we can charge 3% above BoE base rate. We can no longer charge a fee for letters etc.
So assuming average rent in England excluding London of £782, this equates to £1.12 for the first 14 days and £0.08 per day thereafter. I’m sure tenants will be quaking in their boots at the thought of being charged 8p per day if they are late.
There is clearly no incentive for tenants to pay on time. These charges and fee bans should be inline with what the banks charge. It’s just not a level playing field.
My reaction is; I will let new tenants know at the outset, if you are late with your rent, I will issue a Section 21. I’m done with being messed around. Fergus Wilson was very clear on this, you may not like his forthright approach, but he’s right on this.
From the official .Gov guidance published last week >> Click Here
DEFAULT FEES AND DAMAGES PAYMENTS
Q. What is a default fee?
You can only charge a default fee where a tenancy agreement permits you to do so and one of the following applies:
1. A tenant is late paying their rent
- A default fee can be charged for late payment of rent but only where the rent payment has been outstanding for 14 days or more (from the date set out in the tenancy agreement)
- Any fee charged must be no more than 3% above the Bank of England’s base rate for each day that the payment has been outstanding. A fee which exceeds this amount is a prohibited payment.
The tenancy agreement should set out the circumstances under which a tenant is liable for a default fee and how the fee will be determined. This might be called a default fee provision or payment in the event of default provision. Landlords and agents should highlight relevant default provisions within the agreement to the tenantbefore it is signed. Agents must also publicise any default fees they charge on their website and in their offices. If a tenancy agreement does not permit you to charge default fees, you may still be able to recover damages for breach of contract. Most landlords and agents will seek to recover damages by claiming against the tenancy deposit at the end of the tenancy (but may do so at any time through agreement with the tenant or by initiating legal proceedings)
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