Tenant Fees Act 2019 Transition Period Ends

On 1st June 2019 the Tenant Fees Act came into effect in England which banned letting agents and landlords from charging tenants any other fees apart from the following;

  • Rent 

  • Refundable tenancy deposits (now restricted to 5 weeks’ rent where the annual rent is less than £50,000 and 6 weeks’ rent if the annual rent was £50,000 or more)

  • Refundable holding deposits used to reserve the property capped at no more than 1 week’s rent

  • Early termination of tenancy payments (when the termination is requested by the tenant). This payment cannot exceed the loss suffered by the landlord or letting agent

  • Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher

  • Utility payments

  • Default fees to late payments and lost keys where required in the agreement which do not exceed the loss suffered by the landlord, for example for replacing the key. 

The aim of the act is to assure future tenants of what a property rental will cost without any hidden costs surprising them.

The Act was introduced in two stages:

June 2019 update

From 1 June 2019, if you enter into a tenancy agreement in the private rented sector, you will be prohibited from charging any fees or other payments that are not included in the list of permitted payments above. Where a tenancy agreement was entered into before 1 June 2019, landlords and agents are still be able to charge fees until 31 May 2020, but only where these are required under an existing tenancy agreement.

June 2020 update

There has been a transitional period between 1st June 2019 and 31st May 2020. 

This was to allow time for landlords and letting agents to renegotiate their agreements. 
From 1 June 2019, any provision which breaches the ban in a continuing tenancy agreement which was signed before this date continues to be legally binding on the tenant. 

A landlord or agent does not need to immediately return any part of the deposit which is in excess of the cap (as this payment was not made after the cap came into force). However, you will be required to refund the deposit at the end of the tenancy in the usual way and any new tenancy agreed after this will need to comply with the new tenancy deposit cap.

A breach of the fees ban will be a civil offence and comes with a financial penalty of up to £5,000. Repeated breaches of the ban in succession may become a criminal offence with an unlimited fine or a penalty of up to £30,000 as an alternative to criminal prosecution. 

Coronavirus impact

The deposit cap for landlords and lettings agents is based on the rent agreed at the time that the tenancy was entered into or renewed. If the rent has been temporarily reduced due to the financial impact of Coronavirus during the pandemic the tenancy deposit will not be changed according to this legislation. If a new or renewed contract is agreed at the lower rent then refunds would then apply or the deposit would be adjusted. 

HM Lettings offering 

With the fully managed service that HM Lettings offers, landlords receive two inspection visits a year to their property or properties and will be notified of the outcome of this visit. 

As a landlord you should also be aware of the Fitness for Human Habitation Act, introduced on 20th March 2019 which requires that residential rented accommodation is provided and maintained in a state of fitness for human habitation. It is the landlords' responsibility to ensure works and repairs are conducted throughout the tenancy in a timely manner in order to maintain compliance with the Homes (Fitness for Human Habitation). 

Have you got a property to let? Get in touch with HM Lettings today.

Tenant Fees

HM Lettings are members of ARLA Propertymark (the UK’s foremost professional and regulatory body for letting agents and their Client Money Protection Scheme)  and The Property Ombudsman (TPO).


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