Tenant Fees Act 2019
As you may be aware, from the 1st June 2019, the Tenant fee ban comes into action, here are some of the main changes coming in as a result of the Tenant Fee Act are as follows:
In future, the amount of damage deposit which can be taken will be restricted to 5 weeks’ rent. At Bassets, we currently take six weeks’ deposit to help ensure there is enough money to make good any short-comings identified on the check out (where the tenant has also cancelled their standing order prior to paying their last month’s rent). This 5 week restriction applies also to those with pets – where we would normally take a higher deposit!
Any tenancies which are renewed after 1st June 2019 will have to have the excess refunded to the tenant.
Landlords and agents can no longer charge tenants any ‘tenancy’ fees such as referencing fees, preparing an inventory or schedule of condition, registering the tenant’s Damage Deposit, drafting the Tenancy Agreement and dealing with the check out and deposit return at the end of the tenancy. There are a small number of acceptable fees, typically limited to a maximum of £50 including VAT.
If a tenant breaches the contracts, they will not be required to recompense the landlord or agent at the time. This will have to form part of the return of the damage deposit but does not stop the landlord pursuing court proceedings. It is likely that more damage deposit returns will be referred to the Dispute Service for arbitration as a result of this change.
We can only take one Holding Deposit on any one property (which is fine), but the landlord and tenant then have only fifteen days to formally enter into the tenancy agreement. This ‘Deadline Date’ can be formally extended. Holding deposits are restricted to one week’s rent and may be retained by the landlord or agent only in certain circumstances.
Trading Standards, on behalf of the local authority (or a First Tier Tribunal where Trading Standards does not exist) may levy fines of up to £5,000 per breach of the Act. Repeated breaches within five years will be a criminal offence and could result in a fine of up to £30,000. Fines collected can be kept by the Local Authority and so it is likely to be policed heavily!
The other major issue is the inability to serve notice and regain possession of your property if a prohibited fee has been taken (or indeed is in dispute).