Rotherham Private Landlord Forum

The Tenant Fees Act, the law meaning that landlords and letting agents cannot charge fees other than rent, deposits, holding deposits and charges for defaulting on the contract, came into force in England last year, and from Monday 1st June the legislation now applies to all existing tenancies (Assured short-hold tenancies) as well.

In practice, this means that from 1st June 2020, landlords and letting agents in England cannot charge for ‘extras’ such as cleaning, pets, referencing, inventories and administration related costs.

The amount landlords can charge for security deposits or holding deposits is also limited under this piece of legislation.

Security deposits are limited to five weeks’ rent (unless the annual rent for the property exceeds £50,000) in which case the deposit is capped at six weeks’ rent.

Holding deposits are limited to one weeks’ rent.

According to the legislation, the only fees that can be charged are:

• rent
• a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
• a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
• payments associated with early termination of the tenancy, when requested by the tenant
• payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
• payments in respect of utilities, communication services, TV licence and Council Tax
• a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement

Landlords who do not comply with this legislation could face financial civil penalties of up to £5,000 for each offence, with larger financial penalties reaching up to £30,000. Other penalties for non-compliance include a banning order or even criminal prosecution

Additionally, if a prohibited fee has been charged when it should not have been then this will impair a landlords’ ability to successfully serve a Section 21 notice for possession until the prohibited payment has been paid back to the tenant in full.

Further information on the introduction of the Tenant Fees Act (England) 2019 can be found on the National Landlord Association website, where you can download a free e-book, here