Landlords and letting agents in England face a ban on charging private renters fees on setting up a tenancy from 1 June 2019.
The date the Tenants Fees Bill comes into force was announced in the House of Lords by Lord Bourne of Aberystwyth.
“We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on June 1, 2019,” he said.
“This would mean the ban on lettings fees would apply to all tenancies signed after this date.
“The sector has been waiting for legislative certainty and agents now need to ensure that they are fully up to speed and taking steps to implement changes.”
The bill passed the Lords without any major changes but is subject to amendment by MPs, although this is unlikely.
His statement followed a third reading of the Bill in the House of Lords with no major amendment.
Now, the Bill faces a final reading in the Commons before receiving Royal Assent.
The main measures in the bill include:
- Landlords and letting agents only allowed to charge fees for replacing locks, tenancy changes requested by the renter and bills such as utilities and Council Tax
- Holding deposits are capped at one week’s rent
- Security deposits are limited to five week’s rent
David Cox, chief executive of ARLA Propertymark, said,
“With the Tenant Fees Bill completing its passage through the House of Lords this afternoon, it appears the Tenant Fees ban will come into force on June 1, 2019 subject to parliamentary scrutiny in the House of Commons.
“This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation.”
We will be producing an in-depth article about the tenant fees ban when the final legislation is published.
What happens to the holding deposit if a tenant changes his mind and no longer wants to enter the tenancy at the last minutes after costs to check references for example have been incurred? And if the prospective tenants are students and the term has started or is about to start and the accommodation won’t be able to be let, possibly until the next year?
This element has changed during its passage becoming law so we will wait until the final legislation is published and then we will produce an article which will answer this question (and everything else) at that time. Hopefully, there will be a good time between being published and commencing.
Given the speed of progress of anything through parliament right now who would want to put money on this. Even the announcement is woolly ‘into force on June 1, 2019’ and ‘apply to all tenancies signed after this date’ so which is it June 1st or June 2nd 🙂
Yes! The announcement should have said applies to all “on or after 1 June”! Although we agree with you on timing, in our experience, once we get to this stage, it’s highly likely this will be done for 1 June.
Please can you proposed article address any issues with applying a fee to the termination of a tenancy during the contractual period? (i.e. early termination).
I am also looking for this information and need some clarity with regards to this if someone can inform
I do not take a deposit but do charge a one off Non returnable £150.00 Adminstration Fee when signing Contract, will this be no longer permissible
That will no longer be allowed.
Have I missed the point? Re Nick Parkin’s querie “If i have a tenancy agreement of 12 months and the tenant terminates in advance would I be allowed to claim of his/her secure deposit?
We will be answering this point in our article once the final legislation is published but we expect that if a tenant leaves early, you won’t be able to charge a “fee” in consideration for allowing them to go early. However, just as now, you can refuse to accept any offer to surrender early in which case the tenancy continues and “rent” continues to be payable until either the end of the term or sooner when all parties agree. Any unpaid rent will be claimable from the deposit (just as now).
As we say, this comment is subject to the final legislation being published and completion of an article about the new legislation we produce. Here is just reporting on a press release about the proposed date and isn’t intended to be anything more at this stage.
If a tenancy agreement is signed before 1st June but the tenancy is not due to start until 1st July would the landlord still be able to charge fees as it would have been signed before 1st June? (Student house share tenancy agreements generally start 1st July but are signed months before that with fees and deposits also paid).
I would also like this point clarified as Nina quite rightly says the majority of student lets are signed many months before for lets starting in July. It is important to clarify if it relates to a signing date or the tenancy start date.
I undertand that there are rogue landlords but there are also rogue tenants, however it seems that there is no balance in new legislation over the last few years – all anti landlord. Do the powers that be really want to worsen the housing crisis by pricing landlords out of the game, or forcing rent up? Landlords are not treated as other businesses when it come to expenses and taxation.
Will we be able to charge the tenant for the following:
Tenant and Guarantors Credit checks
AST to be drawn up
Cost of producing Inventory
Am I to understand it will only be six weeks rent charged as deposit to be lodged with DPS or TDS
I am not at all working with this law. But I am a tenant. And I would like to respond to your question.
The landlord who rents out its property to a tenant. Has included in his rent sufficient margin to earn some profit after his cost for keeping property, mortgage etc. So within that margin. It should be enough for the landlord to do the credit check, and it should be in the landlords interest to make an Inventory list. So why charge this to a tenant??
Of course if there is a letting agent involved and they would like to charge us for all this things to a tenant. But this is not our problem. We are paying market rent. It is the landlord they should charge if the landlord wants to use letting agents services.
By the way, the rents are so high because it is the letting agents who earn too from our monthly rent. They ask the tenant their budget so if there is any room left for them to earn on our monthly rent, then they too take the opportunity to do so.
These kind of things has made the rent are so high.
If it was a fair market then. We had fair rent.
I am extremely glad to find that this kind of fees are soon ban on. Lets see how many agencies will survice after this. They are looters if you ask me.
Well said. The letting agent i rent from starts chasing me for renewal fees 3 months before the end of tenancy. Vultures
About time the ludicrous amount it costs to rent a property was disposed of. It costs on average £2000 to move into a property now.
The estate agents have been on a winner for years. They get part of the rent. But then, charge the tenant for doing their job! At no point would it ever cost £150 for doing administration or £200 for referencing!
I am a private landlord and I do agree that letting agents charges are ludicrous. I like to be fair and I do let my properties for less than the market rent. When I first started letting property I never charged a prospective tenant/s for the credit or referencing checks but then I had people who obviously knew they would fail but hope they could make some kind of agreement with me so that they could still rent the property so I started to charge prospective tenant/s for the credit checks and referencing. I believe this to be fair because if a prospective tenant/s fail the checks then it ends up costing me time and money. Now that I am unable to charge the prospective tenant/s for the checks can I charge them if they fail?
The only other cost I charge my tenant/s is for the check out inventory, I pay for the check in inventory, which I get a third party to do. I make sure the tenant/s and myself are present when the third party does the check out and any discrepancies that are pointed out are discussed with the tenant and landlord, by doing this if there is any disputes it’s not the landlord that has done the inventory and the tenants feel that the landlord isn’t trying to keep their deposit and that there is a genuine reason for the dispute. I am making sure the property is in a habitable state for the tenant/s to move in so the tenant/s need to make sure the property is habitable state when they decide to move out, this being another reason why I charge the tenant/s for the inventory check out.
I am not a landlord who just lets a property and sits and waits for the rent to hit my bank account, I like to keep on top of the maintenance of a property, this costs me money also I have other costs when renting out property, such as office supplies, taxes etc. I’m sure a lot of tenants think that us landlords have no other expenses!
Being a private landlord that was trying to be fair to tenant/s, I have now been left no choice but to put my rental prices up to match with the current rental market. I cannot wait to see what happens once the Tenant Bill is in full force, tenants think it is good for them but I believe that the rental market prices are going to rise which is going to make it more difficult for people to be able to afford to rent.