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Mon 1 June 2020
The Tenant Fees Act 2019 came into force on 1 June 2019 which banned landlords and letting agents from charging certain fees to tenants and introduced a cap on tenancy deposits.
The 12 month transition period came to an end on 31st May 2020 meaning any clauses in existing agreements (both fixed term and periodic tenancies) outlining the payment of certain fees are now unenforceable.
The only payments that landlords and letting agents may charge to tenants are :
· A refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 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 1 week’s rent.
· Payments associated with early termination of the tenancy, when requested by the tenant.
· Payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy.
· Payments in respect of utilities, communication services, TV licence and Council Tax.
· A default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement.
Any breach of the Tenant Fees Act 2019 will result in the landlord or letting agent repaying the prohibited payment to the tenant. Breaches will incur fines of up to £5,000 and repeat offences can result in a criminal offence and an unlimited fine. It will also not be possible to serve a valid Section 21 Notice until the prohibited payments have been repaid.
Note: The regulations apply to all assured shorthold tenancies (AST), student accommodation tenancies, and most licences to occupy in the private rented sector (England). Tenancies outside the Housing Act 1988, such as common law tenancies or company lets, are not included in the Tenant Fees Act 2019.
A further note on tenancy deposits
It is prudent to note that landlords and letting agents do not need to immediately refund any part of an existing Tenancy Deposit that exceeds the cap of five or six weeks' rent and can hold this for the duration of the existing tenancy.
However, if a tenant renews by signing a new fixed term tenancy agreement any amount of their existing deposit which exceeds the five or six-week limit must be refunded to ensure the new tenancy complies with the tenancy deposit cap.
Should you have any queries on the Tenant Fees Act and the impact it may have on your tenancies, please contact Sam Benson in RH & RW Clutton’s letting agency team.
Further information : Ministry of Housing, Communities & Local Government – Tenant Fees Act 2019
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