Tenancy Fees Act

Tenancy fees ban is almost upon us.

Tenancy Fees

At the moment, tenants can be charged administrative fees, such as tenancy renewal fees, referencing fees, credit check fees, a guarantor forms, inventories and professional cleaning by both landlords and letting agents.

From 1 June 2019 landlords and their agents will no longer be able to charge the fees for tenancies signed on or after 1 June.

The only costs landlords and agents will be able to charge tenants for will be:

• Rent.

• Utilities and council tax if included within the tenancy.

• A refundable deposit, capped at five weeks' rent. The cap could be five weeks' rent for properties where the annual rent is less than £50,000.

• A refundable holding deposit to reserve the property, capped at one week's rent.

• Changes to the tenancy requested by the tenant, capped at £50 (or "reasonable costs").

• Early termination of the tenancy requested by the tenant.

• Defaults by the tenant, such as fines for late rent payments or lost keys. These must be "reasonable costs", with evidence given in writing by the landlord or agent.

Any other fees will be banned, and landlords or agents found charging the fees could be fined £5,000 for a first offence. If they break the rules again within five years, they could be given an unlimited fine.

The Tenancy Fees Act 2019 will apply to new tenancies and renewals of tenancies, excluding statutory and contractual periodic tenancies that arise after it comes into force.

After one year, the ban will attach to pre-existing tenancies and clauses that charge fees in them will become ineffective. If a landlord or agent takes a prohibited payment after that date they will have 28 days to return it or be considered in breach of this legislation.

If you are a landlord or tenant and have any queries or require advice on the impending changes please contact us on 01306 877592 or at enquiries@surreyhillssolicitors.co.uk.

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