Tenant Fees Act 2019 – How well do you know the legislation?

The Tenant Fees Act 2019 launched back on the 1st June 2019. The new legislation was launched changing the landscape of residential letting. As part of this, a ban has been implemented on letting fees and caps on the amount that renters can be charged for their deposit.

Who did this change affect?

It impacts every Assured Shorthold Tenancy (AST) after 1st June 2019 and any Licence to Occupy after that date.

The restrictions have applied to all Tenancies new and old from 01 June 2020.

What are the main changes to the Tenant Fees Act?

When charging a Tenant for minor damages or breakages the onus will be on the Landlord to provide evidence that the claim was reasonable. This could mean providing evidence of the costs before they are levied. The aim is to stop landlords overcharging, such as £50 for a replacement glass or lightbulb.

Deposits will also be limited to an equivalent of five weeks’ worth of rent at the most.

Holding deposits are now limited to the equivalent of one week of rent.

It will be £50 for charges for Tenancy changes, unless the Landlord can prove that the process will cost more.

If a Landlord has been unlawfully deducting fees or holding a deposit, they won’t be able to serve a Section 21 (no fault) eviction procedure until these are paid back.

What can a Landlord charge for?

• Rent

• Tenancy Deposit (subject to five weeks rent equivalency at the most)

• Holding Deposits (subject to one weeks rent equivalency at the most)

• Default payments; if detailed in the Tenancy Agreement

• Payments to cover unpaid utilities; if detailed in the Tenancy Agreement

What happens if the Tenant Fees Act is breached?

The Local Authority Trading Standards Office will be in charge of enforcement and if any prohibited payment is found to have been charged then a Landlord may be prosecuted.

For a first offence a Landlord can expect to receive a fine of up to £5,000. For any further offences this could rise to £30,000 a full criminal prosecution or even a ban on letting properties (limited to one year).

A Landlord will also have to repay the original deducted sum to the Tenant.

What should you do as a Landlord?

• Review your Tenancy Agreements and Licences to Occupy.

• Ensure they have no prohibited payments that have been charged already.

• And make sure they have no facility to do so in the future.

What if a prohibited payment has been made?

If a prohibited payment has been made, then ensure the money is repaid to the Tenant at the earliest opportunity.

How we can help

If you have any specific concerns or require additional information on the Tenant Fees Act 2019 and how they will affect you, then please do get in touch. You can fill out an online contact form here and our Landlord & Tenant team will reach out to you.