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Tenant Fees Act 2019 boosts renters' rights

19 Feb 2019

Renters’ rights in the private residential property sector have been bolstered significantly with the Tenant Fees Act passing into law this month.

With effect from 1 June 2019, ‘unfair’ letting fees will be banned and tenancy deposits will be capped at five weeks’ rent. The Act aims to improve transparency for tenants in respect of landlord’s and agent’s costs and reduce the risk that a tenant will be hit with unexpected costs.

Landlords and letting agents have typically levied administration charges for a range of activities from credit checks, tenancy renewals and referencing to accompanied viewings and receiving inventories.  Under the new law, fees will only be permitted if they relate to rent, security deposits, holding deposits or when a tenant breaches a contract.

According to the most recent English Housing Survey* (2016-2017), there are some 23.1 million households in England, and the private rented sector accounts for 4.7million or 20% of those households.

The Tenant Fees Act started its journey through Parliament in November 2016; the ban on tenant fees was introduced in May 2018 and will come into force from 1 June 2019. From this date all new and renewed tenancies will come under the scope of the new ban; all existing tenancies will be brought under the new rules from 1 June 2020.

Exactly how this will implemented practically is not yet known but lettings agents and landlords should begin to prepare, if they have not already. It is expected that the Government will soon publish its guidance to give greater understanding on how the ban will be applied in practice.

 

*The English Housing Survey is a national survey of people’s hosing circumstances and the condition and energy efficiency of housing in England. You can download a copy of the headline report here.

 

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