Tenant Fees Act 2019
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Tenant Fee Act 2019
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Discovering the U.K.
Contents What is the Tenant Fee Act 2019?......................................................... 4 Who will it Affect? .................................................................................. 4 What Fees can be Charged? ................................................................. 8 What Fees cannot be Charged? ............................................................ 9 Professional Cleaning .......................................................................... 11
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What is the Tenant Fee Act 2019? On the 1 st June 2019 the Tenant Fee Act came into effect in England outlining the Government’s approach to banning letting fees paid by tenants in the private rental sector and capping tenancy deposits. The aim of the Act is to reduce the cost that tenants can face at the outset, and through a tenancy and ensure there are no hidden costs. This means that landlords are now responsible for all costs associated with setting up, renewing and ending a tenancy, from referencing costs to inventory check in fees and so on. A similar scheme was introduced in Scotland in 2012 and a similar initiative took effect in Wales shortly after, in September 2019. Who will it affect? Not all private tenancies will be affected by the legislation, only those that are considered an Assured Shorthold Tenancy (AST). A tenancy is classed as an AST if they fall under the following terms:
+ Tenancy is in an individual’s name and NOT a company’s name + The annual rent is no more than £100,000
What fees can be charged? + Rent
- Paid in advance on a specified rent due date
+ Utility payments - Payments associated with utilities, including gas, electricity, water, council tax, TV charges, telephone and broadband + Security Deposit - Equivalent to 5 weeks rent where the annual rent is up to £50,000 or 6 weeks rent where the annual rent is more than this - Landlords cannot seek a higher deposit if there are pets - Prior to the legislation it was standard to charge 6 weeks rent for all tenancies and 8 weeks if there were pets + Holding Deposit - 1 weeks rent payable to take the property off the market, this money is deducted from the security deposit and rent invoice paid prior to move in - If the tenant withdraws from the offer the holding deposit will be forfeited - Prior to the legislation agents were often charging 2 weeks rent
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+ Change of tenancy fee - Charged if there is a change in the tenancy, for example adding a new tenant
- The maximum fee is £50 unless the agent can prove that additional reasonable costs will be incurred due to the requested change(s)
+ Early termination fee - Charged only if the tenant requests to leave the property prior to the tenancy ending or a break clause taking effect + Fees for later rent payments - Interest can be charged on late rent payments, not exceeding 3% above the Bank of England’s base rate + Fees for loss of keys
What fees cannot be charged? + Tenant set up fees + Referencing fees + Renewal fees + Other administration fees + Inventory check in and check out fees + Any other third-party fees
Professional cleaning Tenants are responsible for returning the property to the same clean standard as they received it. This means that if a property was professionally cleaned at the start of a tenancy, it must be professionally cleaned at the end of the tenancy and the tenant is responsible for the cost of this clean.
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Discovering the U.K.
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