The 2019 Tenant Fee Ban Explained
As a renter, the words ‘tenancy fee’ probably make you want to cover your ears and run back to your family home screaming. However, if you’ve resisted the urge to run away at the sight of the dreaded words then you might be aware that the Government have been discussing putting in place a Tenant Fee Ban (yes, BAN – you can stop screaming). This new legislation is now officially an Act of Parliament (hoorah for renters!).
You’re probably wondering what exactly a ‘Tenant Fee Ban Bill’ means and how this will affect you as a renter. The terminology can be confusing and it’s important you know your rights so that you’re not unlawfully charged. We’re here to answer all those niggling questions you have and make sure you’ve got the new legislation down to a T (for Tenant Fee ban).
What does the ‘Tenant Fee Ban’ mean?
The Tenant Fee Bill covers both a ban on letting fees (the costs incurred with a letting agent such as administration fees) and a cap on deposits. This applies to renting in the private sector and is applicable to all assured shorthold tenancies. This will include the majority of private properties and may include student accommodation. If you’re not sure what sort of tenancy you have, then use this tenancy checker.
When will letting fees be banned in the UK?
At the moment, the ban only applies to England, but Wales is well on the way to bringing the ban into place in the near future. Find out more about the future prospects of the Tenant Fee Ban Bill in Wales here.
Why has the Government introduced a Tenant Fee Ban?
The Government has introduced the Tenant Fee Act to ensure more transparency in the private renting sector by reducing hidden costs. The aim is to make renting more affordable and ensure that the price tags which you see online are a true representation of the cost of renting (Jessie J is wrong, when it comes to property, it is about the price tag).
The ban aims to adjust the favourable relationship between a letting agent and a renter, with the costs incurred when letting a property becoming the responsibility of the landlord instead of the renter.
When does the Tenant Fee Ban start?
The Tenant Fee Ban is coming in on 1st June 2019. Any private properties rented after this date must comply with the new regulations proposed by the Tenant Fee Bill (provided they are shorthold tenancies). If the property has already been rented then the tenant may still be liable for costs (such as renewal fees) after this date. However, from 1st June 2020, any fees prohibited by the Tenant Fee Ban in both new and existing contracts, will not apply.
After the ban, what payments can I still be asked for?
The ban doesn’t mean you’ll be able to afford beautiful penthouses in central London using the spare coins left in your pocket (sigh). Although the cost of renting will be reduced, with the admin fees becoming the responsibility of the landlord and the deposit cap preventing extortionate deposit fees, you will still be responsible for certain costs.
The following payments will still be permitted after the Tenant Fee Ban:
- Holding deposit (refundable and no more than one weeks’ rent)
- Tenancy deposit (refundable and no more than six weeks’ rent)
- Variation to the tenancy agreement as requested by the tenant, such as changing a tenant (capped at £50 unless landlord can demonstrate a greater cost was incurred)
- Early termination of the tenancy as requested by the tenant
- Breakage or loss of property that breaches the contract and is the fault of the tenant (such as the cost of replacing a lost key)
What should I do if the letting agent hasn’t complied with the Tenant Fee Ban and I’ve been charged?
If your letting agent has taken a prohibited fee after 1st June 2019, then you must immediately request a refund. The letting agent will be liable to refund the cost within 28 days, after which they will be in breach of the ban. You can find individually tailored Tenant Fee Ban advice from ARLA (a regulatory body for letting agents) or free legal advice from your local Citizens Advice.
Tenant Fee Ban: The Key Points
- Ban on all new contracts begins on 1st June 2019
- Ban on new and existing contracts begins on 1st June 2020
- Bill covers a ban on letting fees and a cap on deposits
- Currently only applies to England, but with scope to extend to Wales
- Letting agent must refund fee within 28 days if prohibited payment has been taken