Countdown to New Tenant Fee Ban Rules Has Started
Landlords have less than a month to be ready for yet another letting law change.
On June 1 2020, the Tenants Fees Act covered all existing buy-to-let and shared house tenancies and licences in England, including student rentals.
The law already bans landlords and letting agents from charging fees when setting up a new tenancy. From June 1, the measure scraps fees for renewing existing tenancies. This means any clause in a tenancy agreement requiring the tenant to pay fees disallowed by the law is no longer binding.
Landlords cannot charge fees other than rent, security deposits, costs related to breaking the terms of a tenancy agreement and holding deposits. A cap limits security deposits to no more than the amount of five weeks’ rent when the annual rent for a home is less than £50,000 a year.
Landlords can hold on to security deposits of more than the cap received under tenancy agreements or licences that started before June 1. Breaching the ban triggers a fine of up to £5,000. A second breach within five years is a criminal offence with an unlimited fine and can lead to a banning order.
Councils also choose to impose a fixed penalty of up to £30,000 rather than prosecuting through the courts. Tenants can also claim a refund of any unlawfully charged fees plus interest.
Rent Smart Wales introduced similar tenant fee rules on April 28. The main differences are landlords in Wales:
- Have no cap on security deposits
- Can charge tenants with pets a higher security deposit
- Cannot charge a fee for amending a tenancy agreement
The Tenancy Deposit Scheme (TDS) has published a helpful chart highlighting the difference between tenant fee bans in England and Wales.
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