Since June 2020, landlords of all assured tenancies are severely limited on the fees that can be charged to tenants under the Tenant Fees Act 2019. .
Note that this applies to landlords and agents.
Allowable tenant fees (England)
- Rent: As agreed.
- Holding Deposit: Max 1 week’s rent (refundable).
- Security Deposit: Max 5-6 weeks’ rent (refundable, varies by annual rent).
- Utilities/Council Tax: As consumed.
- Default Fees (reasonable costs):
- Lost keys/security devices (actual cost).
- Late rent (interest at Bank of England base rate + 3% after 14 days).
- Changes to Tenancy: Max £50 (or reasonable costs if higher) for changes requested by tenant (e.g., pet, sharer change).
- Early Termination: Actual costs/lost rent if the tenant leaves early.
Prohibited tenant fees include
- Administration/referencing/application fees.
- Tenancy renewal fees.
- Check-in/check-out/inventory fees.
- Guarantor fees.
Rents have to be equally proportioned over the period. This means that it will not be possible to charge an initial high rent, then settling back. Thus if the rent is to be £600 over 6 months it has to be charged at a rate of £100 per month.
It is possible to charge a part month at the commencement and end of the let.
Note if charging premium for pets must be clearly stated in the advert, e.g. without pets £800; with pets £850.
Deposits will be capped at:-
– 5 weeks’ rent for rents below £50k / 6 weeks’ for rents £50k and above.
Holding deposits will be capped at 1 weeks’ rent, and can only be held for a maximum of 15 days, unless agreement to extend between the parties.
The holding deposit can be retained if the tenant:-
- pulls out;
- fails to take reasonable steps to enter into the tenancy;
- fails the Right to Rent check;
- provides false or misleading statements – ensure your application form is correct.
The holding deposit has to be returned if:-
- the landlord or agent pulls out;
- the let goes ahead to a successful tenant
It is permissible to charge a late rent fee up to 3% over the Bank of England base rate
No other fees are allowed, including the cost of sending a letter.
This rate can only be charged after the tenant has been in arrears for 14 days, but can be backdated to the start of the arrears.
You can charge for any lost keys, but only the cost of actually cutting the keys(s). Any other costs, e.g. petrol cannot.
A charge can be made for any extra keys requested by the tenant.
Permitted payments are:-
– Council Tax;
– Electricity, gas or other fuel;
– water or sewage;
– TV licence;
– communication services (e.g. broadband charges)
Change of sharer (capped at £50, or higher if can be justified)
Early surrender of tenancy by tenant (generally, the costs charged for early termination must not exceed the loss incurred)
Penalties
Landlord (or agents) who charge illegal fees will face paying large fines. The first offence would be a civil offence, with a fine of up to £5,000. If the offence is repeated within five years, there would be a criminal offence with a fine of up to £30,000.
Any Section 21 will be invalid unless unlawful fees are returned. It is expected that similar provisions will apply for certain Section 8 grounds under the RRA
Either the Local Authority or the local Trading Standards can enforce the ban.
Government guidance can be seen here. Ensure you look at the tenants guide as well as the landlords.
