Landlords Tenant Fees Ban Transition

Landlords Tenant Fees Ban Transition

“Landlords – Tenant Fees Ban Transition”

Landlords, the Tenant Fees Ban transition period ended on 31 May 2020.

I asked James Duffy, MARLA MNAEA MIRPM, Branch Manager and The Compliance Coach here at Callaways, to give further guidance for Landlords on the Tenant Fees Act.

“James, What are Landlords and Agents allowed to charge tenants under the Tenant Fees Act now that the transition period has ended?”

“All fees charged to tenants are unlawful, unless they are included in the Government’s list of ‘Permitted Payments‘.  For instance,

Landlords (or their agents) can only charge:

  • Rent
  • Utility bills
  • A holding deposit capped at one week’s rent
  • A security deposit capped at five or six weeks’ rent, depending on the annual aggregate rent of the property
  • Rent arrears
  • The cost of replacing a lost key or other security devices
  • Variation to the contract, capped at £50 including VAT
  • A green deal payment or other energy efficiency charges

What Landlords cannot charge for:

  • Administration fees
  • Application fees, set-up fees
  • Contract negotiation fees
  • Referencing fees
  • Check-ins, check-outs, inventory fees,
  • Renewal fees
  • End-of-tenancy fees
  • Saturday move-in fees

And just to clarify, the ban applies in relation to an Assured Shorthold Tenancy (AST), a licence to occupy or a tenancy which meets the conditions set out in paragraph 8 (letting to students) of Schedule 1 to the Housing Act 1988.

It doesn’t include long leases, any non-Housing Act tenancies, a tenancy of social housing, or a licence to occupy holiday accommodation.

Firstly, Enforcement

The Bill places a duty on Trading Standards to enforce the Bill but District Councils that are not Trading Standards authorities will have power to enforce if they chose to do so.

Secondly, Financial Penalties

As a result of a breach of the fees ban, a civil offence will have been committed.  The financial penalty is up to £5,000.

Successive breaches of the ban within five years (where a financial penalty has been issued, or conviction secured in respect of the earlier breach)  would amount to a criminal offence with an unlimited fine.

The Enforcement Authority may impose a financial penalty of up to £30,000 as an alternative to criminal prosecution.

Thirdly, Rogue Landlords Database

Enforcing authorities can also apply for a Banning Order under the Housing and Planning Act 2016. If the Court makes a Banning Order, the local authority must make an entry in the database of Rogue Landlords and Letting Agents.”

Finally, Remember 31 May 2020 

James recommends that Landlords managing their own properties check their systems and ASTs to ensure they are compliant and ready for the transition period which ended on 31 May 2020.

Moreover, using an ARLA Propertymark Letting Agent will give the Landlord extra protection.  Landlords, if you’re not using an ARLA Propertymark Agent, make sure they’re compliant.

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