Tenant Fees Ban – Measures affecting Landlords and Agents

by Property 118

9:11 AM, 7th May 2018
About 2 years ago

Tenant Fees Ban – Measures affecting Landlords and Agents

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Tenant Fees Ban – Measures affecting Landlords and Agents

Government press release on the action to end letting fees.

New Housing Secretary Rt Hon James Brokenshire MP said: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

“That’s why we’re delivering our promise to ban letting fees, alongside other measures to make renting fairer and more transparent.”

Key Measures of the Bill:

Bring an end to letting fees and save tenants around £240 million a year, according to government figures.

The deposit at the start of the tenancy cannot exceed 6 weeks’ rent.

Along with

  • capping holding deposits at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
  • capping the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred
  • creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
  • requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
  • prevents landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
  • enabling the appointment of a lead enforcement authority in the lettings sector
  • amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
  • local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement

Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:

  • a change or early termination of a tenancy when requested by the tenant
  • utilities, communication services and Council Tax
  • payments arising from a default by the tenant such as replacing lost key

All proposals relate to England only. The ban on letting fees will apply to assured shorthold tenancies and licences to occupy in the private rented sector.



Comments

Michael Barnes

1:05 AM, 10th May 2018
About 2 years ago

I don't like the proposals in tenant fees bill, but I do not see what else could reasonably be done to address the problem of the minority of unethical letting agents (and possibly landlords):
- Fees not being made available to tenants until they have committed;
- Fees not being published (a breach of law, but not easy to enforce)
- Excessive referencing fees being charged to several prospective tenants for the same property;
- Fees to enter a new fixed term contract (effectively paying not to be evicted).

But, if you have realistic alternatives, then I would like to hear them.

Monty Bodkin

7:38 AM, 10th May 2018
About 2 years ago

Reply to the comment left by Michael Barnes at 10/05/2018 - 00:52
Take a holding deposit.

If I can use holding deposits to my advantage, I will. But I don't think most landlords will bother. Get it wrong and section 21 can't be used along with huge fines.

Loads of problems retaining holding deposits.
EG, what if a previous landlord refuses your request for a reference?
Far too many holes in holding deposits.

Monty Bodkin

7:48 AM, 10th May 2018
About 2 years ago

Reply to the comment left by Michael Barnes at 10/05/2018 - 01:05
But, if you have realistic alternatives, then I would like to hear them.

Cap fees.
It is the fair and reasonable thing to do. A total ban is knee-jerk legislation that will result in the good tenants paying for the bad tenants.

Michael Barnes

10:33 AM, 10th May 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 10/05/2018 - 07:48
Cap fees.

What would you cap them at?
How would you allow increases?
Would that be an overall cap or a separate cap on each fee?
Would you allow charges to tenant for "renewal" (i.e. a charge to keep their home)?

Monty Bodkin

11:07 AM, 10th May 2018
About 2 years ago

Reply to the comment left by Michael Barnes at 10/05/2018 - 10:33
What would you cap them at?
I'd do a lot more consultation and research but the one week's rent in the bill seems reasonable.

How would you allow increases?
It would increase (or decrease) in line with the rent charged.

Would that be an overall cap or a separate cap on each fee?
Overall.

Would you allow charges to tenant for "renewal" (i.e. a charge to keep their home)?
Only if the tenant wanted a renewal. (i.e not for periodic or when the landlord wanted it).

But as said, I'd do more research and consultation. A lot more than the poor research behind this bill.
Certainly not knee-jerk populist policy without thought of the consequences.

Gromit

12:39 PM, 10th May 2018
About 2 years ago

Political parties/Governments (and this Government is no different) love populist soundbites/policies as it improves their electoral position (cf. Corbyn writing off of student tuition fees, capping rents, etc.) but rarely think them through (policy-making 'on the hoof'). They are then stuck with having to implement or a face losing backing down/U-turn. (Tories NICs on the self-employed, Dementia tax, and Labours "Pasty Tax").

Rob Crawford

14:29 PM, 10th May 2018
About 2 years ago

Reply to the comment left by Mark Alexander at 08/05/2018 - 13:18A little hard Mark! The cost of a Nanny or Nursery would often exceed the average income of a mother should she wish to return to work. In weighing up the benefits that a mother can provide a young child during early development then staying at home is a no brainer for most.

Mark Alexander

14:46 PM, 10th May 2018
About 2 years ago

Reply to the comment left by Rob Crawford at 10/05/2018 - 14:29
Yes, but if there you exclude benefits the decision might be different.

Benefits are not paid by Government, they are paid by Tax-Payers.

My view is that if people are able to work they should have the choice to do so, but they should not receive benefits if they choose not to do so, save perhaps for Job Seekers Allowance for a while.

Nic Burrows

9:52 AM, 12th May 2018
About 2 years ago

Hi folks, what about charging a fee to guarantors if one is needed. As they arnt the tenant would this be legitimate?

jeanette Kirkby

10:01 AM, 12th May 2018
About 2 years ago

Does that mean that if someone asks me for a reference for which I charge £15 to complete the paperwork, then i can refuse to?

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