"New rules ban landlords and letting agents from charging tenants fees for a number of services. Saturday 1 June 2019
From tomorrow, landlords and letting agents will be banned from charging tenants fees for a number of services, including reference checking, credit checks and guarantors.
More than five million renters in England get new rights from Saturday as the Tenant Fees Ban finally comes in, potentially saving them hundeds of pounds.
The change in guidelines will see landlords and letting agents banned from charging tenants for services such as credit checks and inventories, many of which are often inflated an exploitative, says The Mirror .
The ban, first teased in the 2016 Autumn Budget, will come into force on Saturday 1 June. It means certain costs associated with letting a property will be blocked for good. There are also caps on the deposit they can ask for up front, and limits to how much they can charge for late fees too.
It's part of a wider overhaul for the private rented sector, designed to improve the relationship between landlords and tenants.
The act will apply to all shorthold tenancies within the private rented sector - and all tenancy agreements signed off after 1 June 2019. For those already in contract, the rules will kick in on 1 June 2020.
"The only fees that landlords will be able to charge tenants for will be the rent, tenancy deposit, holding deposit, changes to the tenancy agreement, early termination of a tenancy, payments associated with utilities, broadband, a TV licence, council tax, or loss of key, and a default fee for late rent payment," explained Alexandra Morris, managing director of property website MakeUrMove.
1. They won't be able to charge you to view a property
Letting agents will no longer be able to charge tenants to view new, prospective properties under the ban.
2. All admin costs will be banned
All costs associated with referencing, credit checks, guarantors and admin will have to be covered by the landlord.
The only exception will be tenancy agreements that started before 1 June 2019, which state that certain costs, such renewal fees, will have to be paid for.
3. They'll need hard proof to bill you for cleaning
Your agent will only be able to charge you for check-out fees if your tenancy contract was agreed before 1 June 2019.
For everyone else, check-out fees and charges for services such as a professional clean at the end of your tenancy will be banned unless they have a very good reason (with evidence) for it.
4. They won't be able to charge you for a reference
Letting agents will no longer be able to charge tenants for fees sourced by third parties, such as for reference checks, credit checks, insurance policies, gardening services or guarantor requests. Any costs associated with these will have to be paid by the landlord.
5. Rent payments will continue as normal
The way in which you pay your rent won't change on Saturday.
Landlords can only apply to change this through a rent review clause for a permanent increase or decrease in rent.
6. Your deposit will be capped
This will be capped at no more than five weeks’ rent or six weeks if the total annual rent of the property is expected to be more than £50,000.
7. Holding fees will be capped
This will be limited to the equivalent of one weeks’ rent. Agents will also be banned from continuing to advertise a property once they've received a payment.
All other holding deposit rules will continue as normal.
The fee will have to be repaid once the tenant agrees to the tenancy agreement or after 15 days if the agreement doesn't go through.
8. Contract changes will be capped at £50
The maximum amount agents will be able to charge you for amending your contract will be £50.
If the agent expects the associated costs to be higher than this, they will have to show proof of the charges first.
9. 'Moving out early' charges will be capped
This is typically based on financial loss and reasonable costs incurred. The amount should not be more than the amount of rent you would have paid had you followed through with the tenancy until the end of your agreement.
10. Late payments will be capped
A 'late payment' is anything that's more than 14 days overdue. For a landlord to charge you for this, it must be written in your contract.
The penalty fee should also not exceed 3% more than the Bank of England’s annual percentage rate (currently 0.75%) for each day the payment is outstanding.
11. It won't apply to those already in contract (for now)
If your tenancy agreement was signed before 1 June 2019, the new rules unfortunately won't apply.
However, from 1 June 2020, the new rules will apply to everyone - whether you have a new contract or not.
12. Agents face a £5,000 fine for breaking the rules
The fine for breaching the Tenant Fees Act will be a civil offence and a fine of up to £5,000.
However, if a landlord makes another breach within five years of the first fine, then the breach will be classed as a criminal offence instead. A criminal offence could in turn lead to prosecution or a fine of up to £30,000.
Landlords who receive two or more financial breaches in one 12 month period or commit a criminal offence may also find themselves placed on the rogue landlord database.
13. So what can I still be billed for?
Despite the changes, your landlord will still be able to charge you for:
Rent Your tenancy deposit (subject to the caps above)Your holding deposit (subject to the caps above)Any changes you request to your contract (capped at £50)Any requests to terminate your contract early (subject to the caps above)Utility bills such as water, broadband, TV licence and council tax Late rent payments (after 14 days)Replacements for lost keys."
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