Yeehlow

On June 1st, 2019 the UK government will enforce the Tenant Fees Act, a regulation which aims at banning letting fees paid by tenants in the private rented sector and at capping tenancy deposits in England. The Gov.uk official website specifies that the Act is actually part of a wider package of measures that will “rebalance the relationship between tenants and landlords to deliver a fairer, good quality and more affordable private rented sector.” Government officials estimated that with the new Act english tenants could save a complessive amount of £240 million a year, which means about £70 per household!

Reallymoving.com traced the origins of the Tenants Fees Act back to 2016, when Chancellor Philip Hammond announced that letting agents in England would be banned from charging extra fees on tenants “as soon as possible.” From that moment on, the issue has caused (and it keeps causing) much controversy among people active in the industry.

The Act will apply to tenants who are on an assured shorthold tenancy, to licenses and student lettings. Basically, starting from June 2019 the amount that can be charged for starting or renewing a tenancy will be capped at £50, unless the landlord can prove that he/she incurred in greater costs during the procedure. Furthermore, security deposits will be capped at five weeks’ rent for tenancies under £50.000 per year and at six weeks’ rent for larger amounts. The “holding” deposit — the payment made by a tenant to reserve a property — must not exceed one week’s rent and it must be be fully refunded to tenants within seven days of the end of the tenancy, or within 15 days of taking it if the agreement is not completed for any reason.

On the other hand Arla.com explains that, with the new Act, landlords will still be able to charge their tenants with fees related with utilities, taxes, communication services, changes or sudden terminations of contracts and late payments. Also, all the new provisions do not apply to tenancies started before the 1st of June 2019 or to pre-existing tenancies that need to be renewed after that date. In these cases the landlords will have one year to settle and adapt the terms to the new Act. Landlords are concerned because of the extra costs they could face after the enforcement of the Act, and the risk is that many of them will decide to leave the market or increase rental rates. Also, those who breach the Tenant Fees Act’s dispositions could be hit with a £5.000 fine for a first offence. For more specific conditions regarding landlords’ new duties, you can visit this link.

Click here To access the official documentation regarding the Tenants Fees Act on the Gov.uk website.