Tenant Fees Act 2019

In the Chancellors 2016 Autumn Statement, the Government announced their intention to ban all fees charged by landlords and letting agents to tenants throughout England.

Following a consultation of landlords, letting agents, landlord associations, tenants, tenant focused organisations and industry experts, the Government brought forward the Tenant Fees Act in May 2018. This piece of legislation has now passed through all the Parliamentary processes. This Government Act will affect all new tenancies and all renewed tenancies from 1st June 2019, with a proposed transitionary period of one year for all tenancies entered into before 1st June 2019.

The law will mean that all landlords, agents or third parties throughout England cannot charge any fee or take payment for granting, continuing, or ending a tenancy, unless the cost is a Permitted Payment as defined in the forthcoming Act. All other charges, fees and payments will be a Prohibited Payment and subject to a fine and/or a Banning Order (under the Housing and Planning Act 2016).

Permitted Payments that will be allowed are as follows:

  1. Rent (this cannot be variable in amount over the fixed term of the agreement)
  2. A Holding Deposit (the equivalent of 1 weeks rent) held for a maximum of 15 days until contracts are entered into
  3. Security Deposit (a maximum to the equivalent of 5 weeks rent on rents up to £4166.67 per month and the equivalent of 6 weeks rent over £4166.67)
  4. Damages to Property (this is covered by the security deposit and includes cleaning, where agreed with the tenant. Deposits will continue to be protected by Deposit Protection Schemes)
  5. Default Fees (this is limited to the replacement of lost keys / other security devices and late rent payments only)
  6. Utility charges (in the event that a Landlord supplies utility services within the price of the rent: electricity, broadband, TV and council tax etc.)

Prohibited Payments are subject to a punitive fine of £5,000 for the first offence and £30,000 for each additional offence, and making the Section 21 Possessions Notice invalid. A lead Enforcement Authority will be created to oversee and police this new law.

At Parks, we have been preparing for this new law over the past 3 years, through substantially investing in new technology for our Marketing, Property Management processes, property reporting and Accounts operations. Our commitment is to ensure legal compliance for our client landlords, whilst achieving maximum market rent for current tenancies and properties coming to the market for new tenants, achieving the best yields for your investment.

We will continue to update our website as guidance is produced by the Government over the coming weeks leading to the 1st June 2019.

Should any Landlords like to know more about the new Tenant Fees Act please telephone Graham Jasper or Antony Rummins at Parks Residential Ltd on 01273 202089.

For further information on the Tenant Fees Act, please visit http://www.gov.uk/government/collections/tenant-fees-bill

By Louise Mitchell | 4 February 2019

I have used Parks as my main letting agent for over 10 years and always found them to be very professional in all regards, honest in their dealings and interested in my business of multiple lettings.

Landlord, 2018

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