What Is the Tenant Fees Act 2019?

Introduced officially in June 2019, the Tenant Fees Act initially only applied to new tenancies. In June 2020 it related to all tenancies in the UK – both new and existing.  

The Act was brought about to regulate the industry – especially letting agents – after complaints by tenants’ bodies about ‘ridiculous fees’ being charged. 

What Fees Can Letting Agents and Landlords Charge Tenants?

And, in fact, this is one of the biggest changes the new Act has brought to the private rental sector (PRS). Before the Act came in to being, many letting agents would routinely charge tenants hundreds of pounds for renewing a lease every couple of years, for instance. Tenants were also charged for admin, as well as references and inventories being checked. Today that is no longer the case as neither are on the list of permitted payments as stated by the Tenant Fees Act. 

The only fees agents and landlords are allowed to charge are Rent, Holding Deposit and Tenancy Deposit. 

Default Fees as Exceptions 

There are a few exceptions, but these are usually as a result of a request by the tenant to alter the Rental Agreement. This could include adding a new tenant to the Agreement, or allowing a pet on the property. This is known as a default fee. Another could be if the landlord has to pay to replace a key the tenant has lost. Receipts must be provided so that the landlord isn’t profiting at the tenants’ expense. 

You can, also charge interest on late rental payments (ie those over two weeks late) can be charged interest at a rate of up to three per cent plus the Bank of England base interest rate. This will have to be written into the contract, however, otherwise legally you won’t be able to charge for them. 

Maximum Limit for Deposits 

Up until this 2019 Act, landlords and letting agents could charge as much in deposits as they liked. Now the maximum is five weeks’ rent for a Tenancy Deposit (six weeks rent if the annual rental for the property is more than £50,000) and just one week’s rent for a Holding Deposit (previously this could be as high as one or even two months’ rent in popular locations, such as London). 

There are also stipulations about when these must be handed back to the tenant. In the case of a Holding Deposit, for instance, a landlord can only hold the money for15 days (unless another agreement is written up saying this period has been extended). Once the deadline has passed the money must be returned to the tenant with seven days. 

Any landlord or letting agent who fails to adhere to these limits could find themselves on the end of a £5000 court fine. If their behaviour continues and they get caught a second time, he or she is looking at a much bigger fine – up to £30,000 and a criminal record. Trading Standards, as part of the local authority for the area, will be mainly responsible for ensuring landlords abide by the new ruling. 

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