Landlords should not charge tenants a handling fee for arranging repairs – even if the tenant has caused the damage to a rental home.
The new tenant fees ban that came into force in England on June 1 and in Wales on 1 September fails to specify how landlords should handle the costs.
The fee is typically charged by a landlord or letting agent for time involved in arranging a repair – for instance, a repair billed at £100 by a tradesman may be loaded by 10% (£10), making the final cost £110 for the tenant.
Housing law demands the landlord should maintain basic services, such as water, drainage and heating – but in practice the tenant is charged if they cause the need for a repair, such as blocking the toilet.
To try to sort out if the fee can be charged, letting agent trade body the Association of Residential Agents (ARLA) asked leading property lawyer Erol Topal for an opinion.
“The act very clearly defines those fees a relevant person may be required to pay – these do not include letting agency fees and so the additional fee/commission is not, on the face of it, recoverable,” he said.
The problem with a definitive answer, he added, was the law is too new to have been tested before the courts.
ARLA decided charging the fee was too risky for letting agents, who have lost significant income since the tenant fee ban started.
“Such a clause may be subject to challenge under consumer protection legislation and, if successful, would be deemed an unfair term,” said ARLA.
“While agents must make their own commercial decisions on how to take this issue forward, ARLA is not recommending this course of action and as such will not be making any changes to its assured shorthold tenancy agreements.”
Which means under the new law landlords must take the financial hit for paying the cost of arranging a repair even if the tenant is clearly to blame for the problem.
