From 1 June 2019, the Tenant Fees Act came into force in England, meaning landlords and letting agents cannot charge additional fees that are not considered "Permitted Payments", under the Act, to tenants. A similar act, the Renting Homes (Fees etc.) (Wales) Act 2019, comes into effect in Wales from 1 September 2019. Below you can find all the important changes that come into place, and make sure that your landlord or letting agent isn't breaking any rules when it comes to what you pay.
Kept by the agent or landlord, then the reason for doing so must be outlined in writing.
If you purposely provide any false or misleading information (such as lying about your salary) when applying for the property, then the deposit may be withheld.
Landlords and agents can ask for a refundable amount as security against damage to the property. Usually, this is returned in full when you end a tenancy, with money taken off depending on what was agreed in your tenancy agreement.
Under the Tenant Fees Act, Tenancy Deposits will be capped at five weeks' rent where the annual rent is less than £50,000 and six weeks' rent where the annual rent is £50,000 or more. If your current deposit is over the 5-week cap before 1 June 2019, then the excess will be refunded when the tenancy ends, or you sign a new, fixed-term tenancy at some point in the future.
Always read through your tenancy agreement to know what might affect how much deposit you get back.
Landlords and agents cannot ask for a higher Tenancy Deposit for renting with pets, but landlords and agents can charge higher rent if you do plan on having a pet. This must be made clear to you in how the property is advertised, so you can make an informed decision. If you refuse to pay the higher rent, the landlord/agent does not have to allow you to have a pet.
Consider the costs if you're planning on bringing a pet.
Tenancy deposit deductions
Although your deposit is capped at 5 weeks rent, your agent or landlord is still able to deduct from the amount for breaches of the tenancy agreement (such as damage or alterations). However, the amount deducted must be reasonable and reflect the accurate loss to the agent or landlord.
The best practice is to leave the property in the same condition as when you moved in. Make sure to take plenty of pictures to challenge any deductions you disagree with.
Fees that can be charged during the tenancy.
Where they are outlined in the tenancy agreement these are limited to the reasonable costs for:
- Replacing a lost key/security device (i.e. electronic fob)
Replacing a lost key/security device
Charges for replacing a lost key or security device must be evidenced in writing to demonstrate the reasonable costs incurred by the landlord or agent. So, if the agent tries to charge you an unreasonable price for a new key, you can likely challenge the cost.
Make sure to ask for invoices, receipts or evidence in writing that shows what you're paying matches the cost of whatever is being charged.
Late payment of rent
Landlords and agents can only charge interest on rent from when it is more than 14 days overdue.
Interest can be charged at no more than 3% above the Bank of England's annual percentage rate, for each day it is outstanding.
Always pay rent on time to avoid paying more.
You cannot be charged a penalty for contractor call-outs or missed appointments. However, deductions can be taken from your Tenancy Deposit if there is a clause in your tenancy agreement that you may have broken (e.g. not returning the property to the state it was in when you moved in). You can be charged for work or repairs that are deemed necessary before the end of the tenancy (e.g. a broken window) if the damage that has occurred was your fault. But, if you are charged, your landlord or agent needs to provide accurate evidence of the costs required.
Play it safe, follow the rules laid out in your tenancy agreement, and avoid causing damage.
What payments are permitted under the ban?
These payments are allowed:
- A capped, refundable holding deposit
- A capped, refundable tenancy deposit
- Default fees - replacement key/security device, late rent
- Payment on variation, assignment or novation of a tenancy - if you request your contract to be changed
- Payment on termination of a tenancy - if you decide to leave your tenancy before your contracted time
- Payments in respect of Council Tax - if this is not included in your rent
- Payments for utilities (electricity, gas/fuel, water/sewerage) - if these are not included in your rent
- Payments for a TV licence - if this is not included in your rent
- Communications services (internet, landline, cable/satellite television) - if these are not included in your rent
- Green Deal charge - if applicable to your home
Always read your tenancy agreement to know what you're being charged.
Fees that CANNOT be charged are ANYTHING NOT ON THE LIST ABOVE these include:
- Credit checks
- Cleaning services/professional cleaning
- Admin charges
- Gardening services
If you believe you're being charged any fees illegally, then bring it up with your agent or landlord immediately.These are used to reserve a property. The landlord or agent can only take a maximum of one week's rent per property and this can be held for a maximum of 15 calendar days or an agreed alternative deadline for agreement.
Holding Deposits must be returned to the successful tenant within 7 calendar days. With the tenant's consent, the Holding Deposit can be put towards the first month's rent or Tenancy Deposit. The Holding Deposit must also be returned to the tenant if the landlord or agent pulls out before the deadline for agreement.
The landlord or agent can keep the Holding Deposit if the tenant pulls out, fails a Right to Rent check, provides false or misleading information or drags their feet by the deadline for agreement. If the Holding Deposit is.
Geoffrey Collings & Co are members of the RICS Redress Scheme and RICS Client Money Protection Scheme (see our CMP Certificate here).