The new rental laws: No more rip offs & excessive fees

The Tenant Fees Act and how the new rental rules effects single tenants

After more than 2 years of debate and working its way through parliament the ban on what for some agents has been a free for all on unfair letting charges in England,  came into force on the 1^st June. This is really good news for all those renting properties from the private rental sector in England.

The ban brings England into line with Scotland who had already banned letting fees in 2012. The Welsh government is set to impose the same ban in September and Northern Ireland also has plans to introduce new legislation that will do the same.

Who will the new law help?

The new rules are expected to benefit around 4.8M households who could now save hundreds of pounds, anything from £200 to £800 per household in ‘up front’ rental charges whether they’re renting for the first time or moving to a new private rental property. So, whether you’re a single tenant, (officially classed as one-person household), or from all other different types of households entering into a property agreement in England, this affects you.

Coming into force from the 1^st of June 2019.  The ban applies to all new tenancies signed from the 1^st June, onwards and from 1 June 2020 for all other agreements entered into before 1^st June 2019.

WHAT LANDLORDS & THEIR AGENTS CAN’T DO 

Landlords or their agents will only be allowed to ask for a refundable deposit capped at no more than five weeks’ rent (or six weeks where the total annual rent is £50,000 or more).

Tenants in England CANNOT be asked to pay for credit checks or any other fees or extra charges that seemed to have become the norm in some parts or the county.  So from 1^st June, a whole  bunch of often hidden and unfair charges  like made by unscrupulous landlords have been swept away for anyone entering into a tenancy agreement.

They WON’T be able to charge for the renewal of a new tenancy. If the tenancy was entered into before 1 June 2019, renewal fees agreed at the time will be payable – but only until 31 May 2020.

(SO NO MORE:  Viewing fees, renewal fees, charges for inventory checks, credit checks, reference checks,  “check-out” fees, charges for professional cleaning at the end of the tenancy (if it’s been left in good order), charging for a rent guarantor, gardening services, getting the chimney swept, charges associated with keeping pets also outlawed). 

WHAT LANDLORDS OR THEIR AGENTS CAN DO

Landlords or their agents can charge a refundable HOLDING deposit to reserve the property, capped at one week’s rent.  This must be returned to you once you take up the tenancy.

They can request payments for any changes to the tenancy agreement requested by the tenant, they are entitled to charge up to £50 for the work, or the amount of their “reasonable costs” evidenced by receipts and invoices if they are higher. This might include amending the names on a contract when a flatmate you might have moves out and the you  find someone else to move in, or asking to keep a pet, or requesting permission to sublet or run a business from the property.

They can request an “early termination fee” if their tenant requests to leave before the end of their tenancy. But the government states that this must be “capped at the landlord’s loss or the agent’s reasonable incurred costs,”

They can also request a “default fees” for two things; for late payment of rent (that’s at least 14 days overdue) with any interest charges capped at a maximum interest rate of the Bank of England base rate plus 3%. They can also request a “default fee” for the reasonable costs of replacing a lost key or fob that gives access to the building and must provide written evidence.

“This is a landmark moment for the millions of people who rent privately. For too long, families and other renters have had to hand over hundreds of pounds on unfair and uncompetitive letting fees every time they moved home.” Citizens Advice chief executive Gillian Guy

Charities like Shelter and the Citizens Advice Bureau have welcomed the new law. It’s also worth remembering that not all landlords and private rental agencies take every opportunity to rip off their clients. There are plenty of good ones out there who play fair, it’s only the unscrupulous landlords or their agents that hit the headlines.

The rules will be enforced by Trading Standards and local councils and any Landlords or agents found to be charging illegal fees after today can be fined up to £5,000 for a first offence. If they break the rules again within five years, they face an unlimited fine.