It has been announced that the Tenant Fees Bill is set to come into force on 1st June 2019.
The Bill will ban letting fees paid by tenants in the private rented sector and cap tenancy deposits in England. The ban will apply to all tenancies signed after 1st June.
The aim of the Bill is to deliver a fairer, good quality and more affordable private rented sector by reducing the costs that tenants pay at the beginning and throughout a tenancy and improving the relationship between tenants and landlords.
The ban will allow tenants to see how much a property will cost them with no hidden costs.
For landlords, this means you will only be allowed to take payment for rent and deposits from tenants. There are just three other ‘default fees’ you will be able to charge a tenant for, and they will also be limited;
If a tenant causes damage to your property beyond reasonable wear and tear, you may charge them for the cost to repair the damage.
Loss of keys
You may charge the tenant for the cost of replacing them and reasonable costs and evident must be provided in writing (receipts etc). You cannot charge for your time or inconvenience.
Late rent payment
You can charge 3% above the Bank of England base rate in interest.
Landlords can still charge for changes to a tenancy requested by the tenant. £50 would be considered the norm and any charge above this would need to be justified. If tenant wants to leave the contract early, they will be liable to pay the rent up to a maximum of the length of the fixed term of the contract.
Deposits will also be restricted to the equivalent of five weeks rent where annual rent is below £50k.
Failure to comply
Failure to comply with the Tenant Fees Ban could land you in a whole heap of trouble. If you charge a fee that is not permitted, tenants will be able to reclaim the money they have paid, plus interest, via the county court. Trading standards will also have the authority to fine you up to £30k.
You will also be unable to serve a Section 21 notice if you have charged a tenant a fee where you shouldn’t have and kept the money.
How Mistoria Estate Agents can help
At Mistoria Estate Agents, we can manage your buy to let property, including tenant finding and management, on your behalf. This means we can take the burden out of staying compliant with new areas of legislation, including the Tenant Fees Ban. Let us do the hard work of managing your investment whilst you get on with the other areas of your life. Call us on 0800 500 3015 or email email@example.com to see how we can help you.