The government has introduced a draft Tenant Fees Bill, with the aim of making residential letting more fair and affordable for tenants by reducing costs at the outset of a tenancy. It is an attempt to make renting a fairer and less expensive matter for tenants.
The Bill will introduce a ban on unfair letting fees paid by tenants for agents selected and appointed by landlords.
The Bill will apply to housing in England only.
Landlords and letting agents must not require tenants to make any payment or loan as a condition of the grant, renewal or continuance of a tenancy (defined as an assured shorthold tenancy or licence to occupy other than a long lease, tenancy of social housing or licence to occupy holiday accommodation). This includes fees for securing references or inventories and frontloading the rent to recover costs, by charging a higher initial rent.
The only payments permitted to be charged to tenants are:
- The rent;
- A refundable tenancy deposit of no more than six weeks’ rent;
- A refundable holding deposit of no more than one week’s rent (a holding deposit is a payment made by the tenant to reserve a property) and;
- Payment due by the tenant in the event of their default, such as a late payment or breach of the tenancy agreement (an example, payment for a lost key);
Everything else is a prohibited payment.
Trading Standards may impose a fine of up to £5,000 if a landlord or letting agent has charged a prohibited payment.
Trading Standards can prosecute or impose a fine of up to £30,000 if an offence under the Bill has been committed where a landlord or letting agent has been fined or convicted for a breach within the last five years and commits a further breach.
If the entity committing the offence is a corporate body, the officers/directors of that body can be liable for it if the offence was committed with the consent or connivance of them, or was attributable to any neglect by them. The fact that monies taken in fines can be used to fund enforcement action means there is a financial incentive to enforce the Bill.
Adam Fleming – BTMK