The Tenants Fees Bill 2017 – 2019, has formally received Royal Assent and has now become law commencing on June 1st this year. “This means the ban on lettings fees will apply to all tenancies signed after June 1st.” Agents and landlords will only be able to collect rent and deposits from tenants with the exceptions the below which are accepted to be reasonable:
- A change or early termination fee for a tenancy when requested by the tenant
- Utilities, communication services and Council Tax
- Payments arising from Default fees limited to charges for replacement keys or a respective security device, and late rent payments only
It has also confirmed that although landlords can charge for damages any amount recouped from a tenant can only put them back in the same position they were previously. The Act has also introduced a range of powers for local authorities to enable them to crack down on the small minority of rogue landlords and agents who let unfit properties. This includes fixed financial penalties of up to £30,000 and banning orders – possibly for life – for the most serious offenders.
Other government steps to reform the private rental market include:
- a national database of rogue landlords and agents to keep track of those that have been banned from letting
- a mandatory redress scheme for landlords who do not use a managing agent
- an independent regulator to oversee letting agents, setting standards and maintaining minimum qualifications
- new, mandatory 5-yearly electrical installation safety inspections
- considering the case for a specialist housing court to provide greater access to justice for landlords and tenants in property disputes
- capping security deposits at no more than 5 weeks’ rent and holding deposits at no more than 1 week’s rent. It also sets out the proposed requirements on landlords and agents for returning a holding deposit to a tenant
- capping the amount that can be charged for a change to a tenancy at £50 unless the landlord demonstrates that greater costs were incurred
- creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
- requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
- preventing landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
- enabling the appointment of a lead enforcement authority in the lettings sector
- amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to online property portals such as Rightmove and Zoopla
- enabling local authorities to retain the money raised through financial penalties with this money reserved for future local housing enforcement
