On Saturday 1st June 2019 a ban on admin fees charged by landlords and letting agents comes into force in England. It was first proposed in 2016 by the Chancellor in his Autumn Statement and received a Royal Ascent on 12th February. This ban effectively means that landlords and letting agents will no longer be able to charge hundreds of pounds to let a property.
Landlord or a Letting Agent cannot require a tenant (or anyone acting on their behalf or guaranteeing their rent) to make certain payments in connection with a tenancy. You cannot require them to enter a contract with a third party or make a loan in connection with a tenancy.
So what exactly are landlords and letting agents allowed to charge?
According to the guidance published by the Government the only payments that can be charged in connection with a tenancy are:
- the rent
- a refundable tenancy deposit capped at no more than five weeks’ rent where
the annual rent is less than £50,000, or six 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
one week’s rent
- payments to change the tenancy when requested by the tenant, capped at
£50, or reasonable costs incurred if higher
payments associated with early termination of the tenancy, when requested
by the tenant
- payments in respect of utilities, communication services, TV licence and
- a default fee for late payment of rent and replacement of a lost key/security
device, where required under a tenancy agreement
If the fee you are charging is not on this list, it is a prohibited payment and you
should not charge it. A prohibited payment is a payment outlawed under the ban.
What about existing tenancies?
If a tenancy agreement was entered before 1 June 2019, you can continue to
require a tenant to pay fees written into that agreement (e.g. check-out or renewal
fees) until 31 May 2020.
Who will ensure this is enforced?
Duty to enforce ban will fall under Trading Standards authorities but district councils that are not Trading Standards authorities will also have power to enforce if they choose
to do so.
What happens if a landlord/letting agent does not comply?
A breach of the legislation will usually be a civil offence with a financial penalty of up
to £5,000, but if a further breach is committed within 5 years of the imposition of a
financial penalty or conviction for a previous breach this will be a criminal offence.