Letting agents are grappling with the Tenant Fees Act which, from 1st June, outlaws fees for referencing, check-in, inventory and check-out. Property solicitor Ian Narbeth of DMH Stallard, and a PRS landlord for over 30 years, warns that the Act contains some elephant traps for landlords.
“The Tenant Fees Act throws the baby out with the bathwater” he says. “All payments are prohibited unless expressly allowed. If landlords don’t follow the rules they could for example be fined for not returning a holding deposit to a tenant who withdraws without reason. Forfeit the holding deposit of a prospective tenant who has told blatant lies, and the landlord could be punished if he doesn’t follow precisely the Act’s procedures.”
“If landlords overcharge, accidentally or otherwise, by even a penny they may commit an offence” Mr Narbeth adds. Even repaying the tenant as soon as a mistake is spotted does not prevent liability. Councils are tasked with enforcement and Mr Narbeth cautions that some tenants, especially those with large rent arrears or the ‘tenant from hell’ whom every landlord fears, may try to enlist over-worked Councils to threaten landlords with £30,000 fines and being placed on a “rogue landlords’ register”. “Landlords may have to spend thousands on legal fees or even sell up if they cross with crooks who know their way round this Act” he warns.
“Landlords may even have to repay tenants who owe them thousands of pounds” says Mr Narbeth. “Unless landlords take legal advice or are very experienced they could lose their businesses”. “This Act, which MPs are so proud of, goes way beyond what was needed. In the wrong hands it is a rogues’ charter for devious and defaulting tenants. It appears HM Government wants PRS landlords to sell up” he comments. “This Act continues that project.”
If you would like a more detailed write up on this issue by Ian, you can find a more extensive article published at https://www.property118.com/tenant-fees-act-2019-draconian-legislation/
or please contact Ian Narbeth directly on 020 7822 1616 or at Ian.Narbeth@dmhstallard.com