As a tenant, you might have heard of the tenant fee bill, maybe you haven’t. The Tenant Fee Bill (aka tenant fee ban) is an act of parliament that has been shaking up the lettings industry and could change the way we do residential lettings in the UK.
So what is it and what do you need to know?
What is the tenant fee bill?
Up until now, letting agents and landlords have been able to charge pretty much whatever they like for admin charges, inventory checks and a whole host of other random fees. All that is set to change.
As of June 2019, most of these familiar charges will be ‘prohibited payments’. In fact, there will be only six permitted payments that landlords and letting agents will be allowed to charge. They are:
- A deposit of no more than five weeks rent
- A holding deposit of no more than one weeks rent
- Reasonable charges for a lost key or security fob
- Charges for defaulting on your rent payment (or other agreed payments)
- Changes to tenancy agreement, such as adding a new tenant, or ending the tenancy early
Is there anything else I can be charged for?
As always, if you damage the property beyond normal wear and tear, the landlord or letting agent can bill you for the damage. So if you’re throwing a wild party, or you decide you quite fancy a more open plan kitchen (just get rid of that partition wall!) then you could end up footing the bill to put right any damage.
Your deposit should still be kept in a protected scheme, but the landlord has ten days before they have to refund you. So if there are any outstanding bills or other issues with the property, this can be deducted from your rent, although you need to agree to it first.
Savvy lettings agents are increasingly moving to a more all inclusive model, meaning that they’re bundling in extras such as utilities or frills such as gym membership. So long as you’re given the option to sign up and it’s not a required extra, it’s all good.
There is a bit of a grey area around providing a third party service and charging commission (basically it isn’t mentioned in the legal documentation). But, if a letting agent offers cleaning, removals or other services as part of their package, so long as you can choose to use it, they’re within their rights.
The key word here. Choice. Besides those ‘permitted payments’, anything else should be optional.
When does it come into effect?
The Tenant Fee Bill is due to go live on the 1st June 2019. After this date, any administration charges, inventory, credit checks or any other fees not under the ‘permitted charges’ section will become prohibited.
If you sign a tenancy agreement on the 31st May 2019, you could still be charged all of these fees legally. Maybe hold off for a few days…
If your tenancy started before the 1st June 2019 and you’ve been charged fees in advance, such as a check out fee, this isn’t due to be refunded. BUT… On the 1st June 2020, the fee ban will then apply to these older fees and they will need to be refunded to you.
What do I do if I get charged fees by a letting agent?
Most legit lettings agents are on the ball and started to operate under Tenant Fee Bill rules before the legislation went live. No fees and all inclusive are the buzzwords of the moment.
However, that’s not to say some unscrupulous landlord isn’t going to try and charge their tenants an underhand fee in the hope they can plead ignorance. If you think you’ve been charged then contact either your local authority or the Citizens Advice Bureau. Or, if they say they’re going to charge you for referencing, politely remind them they could be fined £5,000.