Tenant Fees Act 2019: The Tenant Fees Act 2019 is a piece of legislation that has brought significant changes to the rental market in England. The act was designed to protect tenants from excessive fees and charges imposed by landlords and letting agents. It applies to all new tenancies signed on or after June 1, 2019, and to renewals of existing tenancies from June 1, 2020.
Under the Tenant Fees Act 2019, landlords and letting agents are prohibited from charging tenants a wide range of fees and charges. These include fees for referencing, credit checks, administration, inventory checks, and professional cleaning. The act also limits the amount of security deposit that can be charged and sets out strict rules for holding deposits.
Landlords and letting agents who breach the act may face financial penalties and could be prevented from serving a Section 21 eviction notice. The act has brought about significant changes to the rental market and has been welcomed by many tenants who have been struggling with the high cost of renting in England.
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Overview of Tenant Fees Act 2019
The Tenant Fees Act 2019 came into effect on 1 June 2019, and it applies to all new tenancies and renewals of tenancies in England. The Act aims to reduce the costs that tenants face at the start of their tenancy, and reduce the risk of hidden fees and charges.
Under the Tenant Fees Act 2019, landlords and letting agents are only permitted to charge tenants for the following:
- Rent
- A refundable tenancy deposit, capped at no more than 5 weeks’ rent (or 6 weeks’ rent if the annual rent is £50,000 or more)
- A refundable holding deposit, capped at no more than 1 week’s rent
- Reasonable costs incurred due to a breach of the tenancy agreement by the tenant, such as late rent payments or damage to the property
Landlords and letting agents are prohibited from charging tenants for a range of other fees and charges, including:
- Administration fees
- Reference checks
- Inventory checks
- Check-out fees
- Renewal fees
The Act also places a cap on the amount that can be charged for a change to a tenancy, such as a change of tenant or a pet being added to the tenancy agreement. The cap is set at £50, unless the landlord can demonstrate that the cost of the change is higher.
The Tenant Fees Act 2019 also sets out the consequences of breaching the Act. A breach of the legislation is usually a civil offence with a financial penalty of up to £5,000. If a further breach is committed within 5 years of the imposition of a financial penalty, this can be treated as a criminal offence with an unlimited fine.
Overall, the Tenant Fees Act 2019 has brought about significant changes to the rental market in England, and has provided greater protection for tenants against hidden fees and charges.
Key Provisions of the Act
The Tenant Fees Act 2019 is a significant piece of legislation that impacts both landlords and tenants in the private rented sector in England. The Act bans most letting fees and caps tenancy deposits paid by tenants. In this section, we will explore the key provisions of the Act in more detail.
Permitted Payments
Under the Tenant Fees Act 2019, landlords and letting agents are only permitted to charge tenants for the following:
- Rent
- A refundable tenancy deposit (capped at 5 weeks’ rent for tenancies with an annual rent below £50,000, or 6 weeks’ rent for tenancies with an annual rent of £50,000 or more)
- A refundable holding deposit (capped at 1 week’s rent)
- Payments in the event of a default by the tenant, such as a lost key or failure to pay rent on time (subject to certain restrictions)
Prohibited Payments
The Act prohibits landlords and letting agents from charging tenants for a wide range of services, including:
- Fees for setting up a tenancy
- Fees for renewing a tenancy
- Fees for referencing and credit checks
- Fees for inventories and check-out reports
- Fees for professional cleaning
- Fees for gardening services
- Fees for the provision of utilities and communication services
Default Fees
The Tenant Fees Act 2019 allows landlords and letting agents to charge tenants for certain default fees, but only in specific circumstances. These fees include:
- A fee for late payment of rent (capped at 3% above the Bank of England base rate)
- A fee for replacement of a lost key or security device (capped at the reasonable cost of the replacement)
Payment Cap
The Act also imposes a cap on the amount of money that landlords and letting agents can charge tenants for a tenancy deposit. This cap is set at 5 weeks’ rent for tenancies with an annual rent below £50,000, or 6 weeks’ rent for tenancies with an annual rent of £50,000 or more. The Act also sets out rules for the return of the deposit at the end of the tenancy, including time limits and the requirement to provide certain information to the tenant.
Implications for Landlords
The Tenant Fees Act 2019 has significant implications for landlords in England. Here are two key sub-sections that landlords need to be aware of:
Penalties for Non-compliance
Landlords who do not comply with the Tenant Fees Act 2019 can face hefty penalties. The first offence can result in a fine of up to £5,000, while subsequent offences within five years can result in an unlimited fine. It is therefore important for landlords to ensure that they are familiar with the Act and that they comply with its provisions.
Changes in Lease Agreements
The Tenant Fees Act 2019 prohibits landlords from charging tenants for a wide range of fees, including fees for referencing, credit checks, and inventories. Landlords can only charge tenants for the rent, a refundable tenancy deposit, a refundable holding deposit, and certain other permitted payments. Landlords must also ensure that any tenancy agreements they use comply with the Act.
Under the Act, landlords can no longer require tenants to enter into contracts with third-party providers for services such as cleaning or gardening. Landlords are also prohibited from requiring tenants to purchase insurance from a specific provider or to use a specific utility provider.
In summary, the Tenant Fees Act 2019 has significant implications for landlords in England. Landlords must ensure that they comply with the Act’s provisions to avoid penalties and legal action. They must also ensure that any tenancy agreements they use comply with the Act’s requirements.
Implications for Tenants
Rights and Protections
The Tenant Fees Act 2019 provides tenants with several rights and protections. Under the Act, landlords and letting agents are prohibited from charging tenants certain fees, such as fees for referencing, credit checks, and inventories. The Act also limits the amount of deposit that a landlord can request from a tenant, to no more than five weeks’ rent for tenancies with an annual rent of less than £50,000.
Tenants are also protected from retaliatory evictions, which occur when a landlord seeks to evict a tenant in response to a complaint or request for repairs. Additionally, landlords and letting agents are required to be members of a government-approved redress scheme, which provides tenants with a means of resolving disputes.
Refund of Unlawful Fees
If a tenant has paid an unlawful fee under the Tenant Fees Act 2019, they are entitled to a refund. Landlords and letting agents are required to repay any fees that have been charged unlawfully within 28 days of the request for repayment. If the fees are not repaid within this time frame, tenants can take legal action to recover the fees.
Tenants should keep records of any fees that they have paid, including receipts and invoices, to help them claim a refund if necessary. If a tenant believes that they have been charged an unlawful fee, they should contact their landlord or letting agent in writing to request a refund. If the fees are not repaid, tenants can seek advice from a Citizens Advice Bureau or a solicitor.
Overall, the Tenant Fees Act 2019 provides tenants with important rights and protections, and helps to ensure that renting is more affordable and transparent. Tenants should be aware of their rights under the Act, and should not hesitate to take action if they believe that their rights have been infringed.
Enforcement of the Act
The Tenant Fees Act 2019 is enforced by local authorities and trading standards. In addition, tenants have the right to recover unlawfully charged fees through the First-tier Tribunal.
Role of Trading Standards
Trading Standards is responsible for enforcing the Tenant Fees Act 2019. They have the power to take action against landlords and letting agents who breach the Act. This includes issuing fines of up to £5,000 for a first offence and an unlimited fine for a second offence committed within 5 years.
Trading Standards can also apply for a banning order against a landlord or letting agent who has been convicted of a banning order offence. This means that the landlord or letting agent will be banned from letting or managing properties for a minimum of 12 months and up to a maximum of life.
Role of the First-tier Tribunal
Tenants who have been charged unlawful fees can recover the money through the First-tier Tribunal. The tribunal has the power to order the landlord or letting agent to repay the fees to the tenant.
In addition, the tribunal can also impose a financial penalty on the landlord or letting agent. This penalty can be up to three times the amount of the unlawfully charged fee, with a minimum penalty of £100 and a maximum of £5,000.
It is important to note that the tribunal can only consider cases where the tenant has already paid the fee and has not been able to recover it through negotiation or other means. The tribunal cannot consider cases where the fee has not yet been paid or where the tenant has already recovered the fee.
Overall, the Tenant Fees Act 2019 provides tenants with strong protections against unlawful fees. Local authorities, trading standards, and the First-tier Tribunal all play important roles in enforcing the Act and ensuring that tenants are not unfairly charged.
Effects on the Rental Market
The Tenant Fees Act 2019 has had a significant impact on the rental market in England. The act has brought about a number of changes that have affected both landlords and tenants. Here are some of the key effects of the act on the rental market:
Reduction in Tenant Fees
One of the most significant effects of the Tenant Fees Act 2019 has been the reduction in tenant fees. The act bans letting fees for tenants and limits the amount that landlords and agents can charge for tenancy deposits and holding deposits. Under the act, tenancy deposits cannot exceed five weeks’ rent, while holding deposits cannot exceed one week’s rent. The maximum charge for a change to a tenancy is also limited to £50 unless the landlord can prove that costs exceeding this value were incurred.
Increased Transparency
The Tenant Fees Act 2019 has also increased transparency in the rental market. The act requires landlords and agents to provide tenants with a breakdown of any fees that they are being charged. This includes details of what the fees cover and how they are calculated. The act also requires landlords and agents to publish details of their fees on their websites and in their offices.
Changes to Rent Increases
The Tenant Fees Act 2019 has also brought about changes to how landlords can increase rents. Under the act, landlords can only increase rents once a year and must give tenants at least one month’s notice of any increase. Landlords are also required to provide a statement of the new rent and the date on which it will take effect.
Impact on Landlords and Agents
The Tenant Fees Act 2019 has had a significant impact on landlords and agents. The act has reduced the amount of money that they can charge tenants and has increased the amount of paperwork that they need to complete. Landlords and agents are also required to return holding deposits to tenants within seven days of the tenancy agreement being signed.
Overall, the Tenant Fees Act 2019 has brought about significant changes to the rental market in England. The act has reduced the amount of money that tenants need to pay upfront, increased transparency in the rental market, and brought about changes to how landlords can increase rents. While the act has had some impact on landlords and agents, it has been largely welcomed by tenants.
Conclusion
The Tenant Fees Act 2019 is a significant piece of legislation that has brought about important changes to the rental market in the UK. The Act has banned letting fees paid by tenants in the private rented sector and has placed a cap on the amount of security deposit a landlord can ask for. It has also introduced a range of other measures designed to protect tenants and improve the transparency of the rental market.
The Act has been widely welcomed by tenants, who have long felt that they were being unfairly charged by landlords and letting agents. It has also been praised by many experts in the field, who believe that it will help to create a fairer and more balanced rental market in the UK.
However, the Act has not been without its critics. Some landlords and letting agents have argued that it will make it more difficult for them to operate and could lead to higher rents for tenants. Others have claimed that the Act does not go far enough and that more needs to be done to protect tenants from unscrupulous landlords and letting agents.
Despite these criticisms, the Tenant Fees Act 2019 represents an important step forward for tenants’ rights in the UK. By banning letting fees and introducing other measures to protect tenants, the Act has helped to create a fairer and more transparent rental market. As such, it is likely to be welcomed by tenants and landlords alike, and could help to improve the overall quality of the rental market in the UK.
Frequently Asked Questions
What is the Tenant Fees Act 2019?
The Tenant Fees Act 2019 is a law that regulates the fees that landlords and letting agents can charge to tenants in England. It came into effect on June 1, 2019, and applies to all new tenancies signed on or after that date.
What fees are prohibited under the Tenant Fees Act 2019?
The Tenant Fees Act 2019 prohibits landlords and letting agents from charging tenants certain fees. These include fees for:
- Tenancy agreements
- Credit checks
- Inventories
- Cleaning services
- Gardening services
- Renewal of tenancy agreements
- Early termination of tenancy agreements
- Late rent payments
What are the permitted payments under the Tenant Fees Act 2019?
The Tenant Fees Act 2019 allows landlords and letting agents to charge tenants for certain things. These include:
- Rent
- Deposits (capped at 5 weeks’ rent for annual rent below £50,000)
- Holding deposits (capped at 1 week’s rent)
- Changes to the tenancy agreement requested by the tenant
- Early termination of the tenancy agreement requested by the tenant
- Utilities and council tax (if agreed in the tenancy agreement)
What is Section 21 of the Tenant Fees Act?
Section 21 of the Tenant Fees Act 2019 prohibits landlords from serving a Section 21 notice to evict a tenant if they have charged prohibited fees. This means that if a landlord has charged a prohibited fee, they cannot use the Section 21 eviction process to evict the tenant.
What is Section 3 of the Tenant Fees Act 2019?
Section 3 of the Tenant Fees Act 2019 requires landlords and letting agents to return any prohibited fees that they have charged to tenants. This must be done within 28 days of the payment being made. If the fees are not returned, the tenant can apply to the First-tier Tribunal to get them back.
How does the Tenant Fees Act 2019 affect deposit refunds?
Under the Tenant Fees Act 2019, landlords and letting agents must return a tenant’s deposit within 10 days of the end of the tenancy, unless there is a dispute over the amount. If there is a dispute, the deposit must be protected in a government-approved tenancy deposit scheme until the dispute is resolved.
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