Landlords to be barred from charging extortionate tenant fees as new rules come into force
Tenants will no longer have to pay extortionate fees to landlords and letting agents from Saturday 1 June as new rules come into effect.
The Tenant Fees Act will come into force on Saturday 1 June and will see fees for signing tenancy contracts to checkout fees banned across England, bringing the region in line with Scotland.
What will be banned?
Many landlords and letting agents manage to make a large amount of their profit through charging prospective and existing tenants huge sums of money for the most basic of tasks.
This can include credit checks, inventories, cleaning services, referencing and gardening, but can also extend to some simple tasks.
Some tenants have reported letting agents such as YourMove charging £60 for a ‘check-out fee’ which was in fact simply handing the keys to an agent in the office or for the renewal of a tenancy.
Other fees can reach the hundreds of pounds with Carter Jonas charging a non-refundable £330 application fee for a single occupancy flat in Oxford.
The fees can be so high that tenant fees plus an initial deposit on a flat can be more than two month’s rent which can cause financial difficulties for renters.
All of these fees will be banned, but landlords will still be able to pass on utility bills, council tax, and charge for things such as replacement keys.
Fee caps will also come into force for deposits, holding deposits and changes to tenancy terms, making the act of renting immediately more affordable.
The government states, “After the ban comes into force a landlord or agent cannot charge you for any activity or for their time in setting up a new tenancy.
“It is a landlord’s responsibility to pay for services they contract, including any costs associated with setting up a tenancy. This includes fees for referencing and credit checks, guarantor fees and administration.”
What to look out for ahead of and after the changes
Some less scrupulous letting agents may well be putting pressure on tenants to sign new contracts or to rush into renting a flat due to the new rules.
If you are being pressured into signing a lease renewal or looking into renting a new flat in England, make sure you wait until after 1 June to avoid any nasty fees.
Georgie Laming of Generation Rent told The Mirror, “We’ve found letting agents across the country disregarding the law or deliberately misleading tenants.
“Probably one of the most shocking examples was a letting agent who told a tenant that the letting fees ban was ‘like Brexit’ in that it was constantly being delayed and probably wouldn’t happen so she should sign a contract now.”
You can see all of the full guidance for tenants on the government’s website here.