It has been announced that the Tenant Fees Act 2019 will commence in England from 1 June 2019.
Although at the time of writing, some reasonable charges may still be made, we are aware that many student lettings are being signed up right now and we’ve had requests to update our agreements early so they’re compliant now (even though they don’t need to be).
This is a good idea as we might as well get used to not charging fees and, because student lettings signed up now won’t likely end until around September 2020 (after the one year transition period for existing tenancies), it’s better to be compliant.
What’s Been Changed to Our Agreements?
As it happens, there wasn’t much change needed because our agreements didn’t impose many charges anyway. It was just a few minor changes needed such as updating the interest rate on unpaid rent, removal of reasonable charges for letters or visits after non-payment and a change to the locks and keys section.
The Tenancy Builder has now been updated and the following agreements have been updated:
- Assured shorthold tenancy (no deposit)
- Assured shorthold tenancy (deposit)
- Lodger agreement
The main changes to these agreements include:
- Removal of any references to third-party contracts
- Changed the interest rate on unpaid rent
- Removed reasonable charging for letters or visits after non-payment of rent
- Altered the keys and locks section to comply with Tenant Fees Act 2019
- A few other small tweaks to some wording.
What if I Want to Charge Fees Using The Tenancy Builder Currently?
If you’re in England and want to charge reasonable fees between now and when the legislation commences (1 June 2019 from the information we have), you can still do so. The changes to our agreements do not prohibit any charges. It’s just that now there is no mention of certain charges or where it is still possible to charge, the wording has been changed.
Therefore, if you want to make charges before 1 June 2019, you can still insert your fees into the additional clauses box on the last page of the Builder. As an alternative, you may want to attach to the agreement a list of fees (this would be particularly useful if you’re an agent as you have to have a list of fees by law). The tenant could be asked to sign an additional “list of fees” document if you preferred.
If you currently charge an “admin fee” or “referencing fee” before the tenancy commences (which will be banned from 1 June) then that’s fine until the legislation commences but such a fee does not need inserting into the tenancy because they will have already paid as it was for pre-tenancy and not during the tenancy.
Obviously, once the legislation commences, fees will be limited to those allowed for in the Act and our tenancy will be compliant with those allowed fees. From that point onwards, you shouldn’t use the additional clauses box for fees.
Remember, the fees ban only applies to assured shorthold tenancies and licences (lodger agreements) and as such, the contractual and assured tenancy remains unaffected by the Tenant Fees Act.
For the time being, we have decided not to separate the tenancy agreements produced for England or Wales (although attachments are already separated according to country).
In Wales, no date for a fee ban has been announced other than it’s progressing through the Assembly. However, our updated agreements only have provision to make certain charges to comply with the England fees ban from 1 June 2019.
As such, if you’re in Wales, you can still add reasonable charges into the “additional clauses” box on the last page of the Builder. If you’re unsure if any fees are reasonable, don’t hesitate to ask.
As an alternative, you may want to attach to the agreement a list of fees (this would be particularly useful if you’re an agent as you have to have a list of fees by law). The tenant could be asked to sign an additional “list of fees” document if you preferred.
If you currently charge an “admin fee” before the tenancy commences then that’s fine but such a fee does not need inserting into the tenancy because they will have already paid the fee as it was for pre-tenancy and not during the tenancy.
If you have any thoughts as to how the Builder could be improved in respect of inserting fees that you might be charging currently, please do let us know any ideas. Have in mind though they will be banned at some point soon.