Understanding the Tenant Fees Act 2019 – A Tenants Guide

The Tenant Fees Act came into force on the 1st June 2019, and applies to tenancies entered into on or after that date. It controls what charges Landlords and Letting Agencies can legitimately charge tenants who are wanting to rent a property.

Whilst the Act hasn’t eliminated charges completely, it sets out very clearly what a tenant can be asked to pay and caps some of the amounts that a tenant can be asked to pay.

A Landlord or Letting Agent who breaches the Legislation can be fined and can be ordered to refund the monies wrongly charged to a Tenant.

What can I be asked to pay?

If you are entering into an Assured Shorthold tenancy, a licence or a student letting provided by a specific educational institution, you can be asked to pay:

• A Holding Deposit of up to one week’s rent – only one holding deposit can be taken per property and this must be repaid by the person who received this if a tenancy agreement is entered into or where the landlord/Letting agent decides before the deadline for agreement not to enter into the tenancy;
• A deposit which is capped at 5 weeks rent;
• Rent but the rent cannot be higher than an ordinary month’s rent;
• Loss of keys – evidence of the costs sought to be charged needs to be provided in writing;
• Interest on overdue rent capped at an annual percentage rate of 3% above the Bank of England Base rate;
• Repairs/ damages at the end of the tenancy;
• Only where a tenant requests a variation, assignment or novation of the agreement can a charge be levied – if the amount exceeds the greater of £50 or the reasonable costs incurred, it will not be permitted.

What is a “Prohibited Payment”?

A Landlord/Letting Agent cannot ask for payments in respect of:

• Credit checks;
• Viewing Fees;
• Tenancy set-up fees;
• Inventory costs;
• Check out fees at the end of the tenancy;
• Professional end of tenancy cleaning;
• A reference.

Whilst this legislation only applies to new Tenancies entered into on or after the 1st June 2019,or renewals on or after that date, there are some transitional provisions which mean that where a tenancy was entered into prior to the 1st June 2019, and a tenant was required to make prohibited payments, those clauses are no longer enforceable against a Tenant from the 1st June 2020, but he tenancy agreement continues.