If you are in the property industry it cannot have escaped you that a major change is afoot for landlords, letting agents and tenants.
The Tenant Fees Act 2019
The Tenant Fees Act 2019 comes into force on the 1 June banning all tenant fees charged by agents and landlords except those specifically permitted by the Act. The ‘permitted’ fees include rent, security deposits, holding deposits, early termination and some default fees.
The ban applies to all residential ASTs in England entered into on or after 1 June, including existing tenancies that renew for a fixed term. Tenancies continuing after 1 June on an existing fixed term or periodic basis will be bound by the terms in the current contract meaning agents and landlords will still be able to charge fees on these up to 31 May 2020. After this any fee taken will be classed as a ‘prohibited payment’.
The other big change is the tenant’s security deposit which is capped at five weeks rent (or six weeks rent if the annual rent is £50,000 or more).
The aim of the Act is to reduce costs that tenants can face at the outset and throughout a tenancy, aiming to deliver a fairer, good quality and more affordable private rented sector.
Letting agents are still required to display their fees schedule and client money protection in their offices and on their websites to make these as transparent as possible. The act will now enforce visibility on all advertising too whether this be rental pages like Rightmove or Zoopla, social media or magazines.
