Tenant fees act – Renewal with higher rent £50?

by Readers Question

12:47 PM, 24th May 2019
About 3 months ago

Tenant fees act – Renewal with higher rent £50?

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Tenant fees act – Renewal with higher rent £50?

The act states that a payment is permitted, if a landlord makes a Variation, Assignment or Novation to a tenancy at the tenants request to allow a pet or another person to stay at the dwelling.

So if I draw up a renewal with higher rent, would this qualify for the fee of up to £50 as it is a variation to the original contact?

Many thanks

Paul

Editors note: Landlord and Agents Guidance the Tenant Fees Act >> Click Here

The only payments you can charge in connection with a tenancy are:
a) the rent
b) 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
c) a refundable holding deposit (to reserve a property) capped at no more than
one week’s rent
d) payments to change the tenancy when requested by the tenant, capped at
£50, or reasonable costs incurred if higher
e) payments associated with early termination of the tenancy, when requested
by the tenant
f) payments in respect of utilities, communication services, TV licence and
council tax; and
g) A default fee for late payment of rent and replacement of a lost key/security
device, where required under a tenancy agreement

e) changes to the tenancy (capped at £50 or reasonable costs if higher)
Where a tenant requests a change to the tenancy agreement (e.g. a change of sharer or permission to keep pets on the property) you are entitled to charge up to £50 for the work involved in amending the tenancy agreement or the amount of your reasonable costs if they are higher. It is good practice for a landlord or agent to agree to reasonable requests to vary the tenancy agreement. The general expectation is that the charge will not exceed £50.

You should provide evidence to demonstrate the reasonable costs of carrying out the work if you wish to charge above £50. Any charge that exceeds the reasonable costs you have incurred will be a prohibited payment.

Please note: the provisions on a change to the tenancy does not apply to a renewal or to the length of the tenancy. From 1 June 2019, agents and landlords will not be able to charge for a renewal of a tenancy under the Act.

However, if the tenancy was entered into before 1 June 2019 and it was agreed in their contract to pay certain renewal fees, then a landlord or agent can charge these fees for a new fixed-term agreement or statutory periodic agreement up until 31 May 2020.



Comments

Neil Patterson

12:49 PM, 24th May 2019
About 3 months ago

Hi Paul, please see .gov guidance above

Richard Peeters

13:26 PM, 24th May 2019
About 3 months ago

"g) A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement"
Hi Neil,
Would an admin fee (e.g. of £25) for later payment/arrears reminder letters be allowed?
What about different fees for replacement keys, attendance for lock-outs, after-hours attendance?
Regards, Richard

Chris Clare

15:57 PM, 24th May 2019
About 3 months ago

Reply to the comment left by Richard Peeters at 24/05/2019 - 13:26
Sadly not Richard.

For late payment of rent, landlords and agents may only charge 3% above the Bank of England base rate in interest on the late payment of rent from the date the payment is missed. They may not charge for sending reminder letters.

We have concluded that as the calculation of this interest yields £1.75 per month based on a late payment of £600 it is hardly worth collecting. When factoring in bank charges you're only left with a little over a pound. However the risk of getting it wrong far outweighs the benefit of the potential quid.

Michael Barnes

22:33 PM, 24th May 2019
About 3 months ago

Reply to the comment left by Richard Peeters at 24/05/2019 - 13:26I believe that you can charge T for your costs incurred (for any breach of the agreement by T): postage, printing, phone calls, etc.
See S1(6)(e)(ii) of the Act.

Michael Barnes

22:49 PM, 24th May 2019
About 3 months ago

So if I draw up a renewal with higher rent, would this qualify for the fee of up to £50 as it is a variation to the original contact?
If you just want to charge a higher rent, then no.
If the tenant wants a change to the agreement and you have both agreed that a higher rent should be charged once that change has been agreed and you have agreed that there will be the charge for making the change, then yes (but it seems unreasonable to me to make a charge as well as taking extra rent).

Chris Daniel

0:37 AM, 25th May 2019
About 3 months ago

Reply to the comment left by Chris Clare at 24/05/2019 - 15:57
... and that 3% is only after 14 days of the rent being in arrears !

Chris Clare

14:41 PM, 28th May 2019
About 3 months ago

Reply to the comment left by Chris Daniel at 25/05/2019 - 00:37
Hahaha that makes it really attractive doesn't it.
We are just becoming a cut price payday lender.


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