Since 1 June 2019, landlords and agents have been unable to charge a number of fees in England for new tenancies signed on or after that date.
As of 1 June 2020, this ban on fees has extended to include most existing tenancies as well.
What type of tenancies this apply to?
In England, ASTs, student accommodation, and licenses. Company lets and non-assured tenancies are exempt of this legislation.
What fees are banned?
Most fees are banned. The Tenant Fees Act 2019 (TFA) starts by prohibiting charging fees on virtually everything. It then creates a number of permitted fees which can be charged.
In England, the legislation bans anything that the tenant (or someone acting on their behalf like a guarantor or parent) is required to pay as a condition of the grant, renewal, continuance, variation, assignment, novation or termination' of an assured short hold tenancy or license agreement.
This is a very broad definition which means almost all fees are banned by default under the TFA. This definition also includes payments to most third parties, either for services throughout the tenancy or for specific performance of a job and loans from third parties.
Examples of banned fees then would be:
Charging for a guarantor form
Professional cleaning at the end of the tenancy (England only)
Having the property de-fled as a condition of allowing pets in the property
Requirements to pay for an insurance provider
What fees are permitted?
The Tenant Fees Act 2019 allows fess such as:
A security deposit
A holding deposit
Certain specified default fees
The rent is not limited in any way by TFA, so landlord can ask for any level of rent , he believes is achievable for the property, However, landlord can't get around prohibited fees by charging higher rent for the first month and then 'normal rent' for the rest of the contract.
Security deposit is permitted payment, but is limited to 5 week's for all tenancies where rent is less than £50,000 per annum. If rent is above £50,000 then security deposit is limited of 6 week's of rent.
it has been a common practice o charge additional payment if tenants wants to have a pet in property. This is prohibited by TFA. what can be done is to charge a premium rent if tenants want to keep pets. This way security deposit is effectively spread throughout the term of the tenancy.
The basic rules of holding deposit are that up to one week's rent can be charged and held for 15 days. This is expected time to reach agreement between the landlord and tenant. This 15-day period can be extended if both parties agreed.
If landlord withdraws from the transaction within 15 days then deposit has to be fully returned to the tenant. If the landlord, or the agent, does not complete for reasons within their control in 15 days period then deposit has to be fully paid back.
If the tenant withdraws from the transaction within 15 days then deposit, or drag their feet and procedure can't be complete within 15 days period then tenant will loose deposit in full. Also, if prospective tenant gives false or misleading details for referencing and causes the landlord to refuse them, or they will fail right to rent check, they will also loose deposit in full.
During the tenancy, variant of problems may occur which are results of tenant action or inaction and this may result a additional cost for the landlord and agent. some of the instances results in the landlord or agent being able to charge default fees to tenant.
Charges can be made relate to:
surrender of tenancy
damages to the property