What is it for?

The Tenant Fees Bill (the ‘Bill’) is aimed at banning fees or other charges paid by tenants in England and applies to both landlords and letting agents.

What fees are banned?

The ban will cover any fees that are payable by the tenant or someone acting on their behalf as a condition of the grant or renewal of a tenancy and includes payments to third parties.

Examples of banned fees:

  • Credit checks
  • Inventories
  • Cleaning services
  • References
  • Administrative charges

What fees can be charged?

Holding deposits

Holding deposits (which reserve a property prior to a tenancy) can be paid but are to be limited to 1 weeks’ rent. The Bill also makes various proposals for when a holding deposit must be repaid to a tenant should the tenancy fail to complete.

Rent

Landlords and agents will be banned from charging an initial period of higher rent before reducing it to a lower level for the remainder of the tenancy. This is designed to prevent landlords and agents from artificially increasing the rent to recover the banned fees.

Deposits

The Bill provides that a deposit paid by a tenant on grant of the tenancy is to be limited to 6 weeks’ rent.

Penalties

In the event that the landlord or agent receives a banned fee the tenant can seek recovery of these sums from them.

Local enforcement authorities can enforce penalties against landlords or agents. These can include fines to a maximum value of 5,000 for the first offence and a further fine of up to 30,000 for later offences. Landlords may be subject to criminal prosecution and / or banning orders prohibiting the landlord or agent from letting or managing residential properties.

A landlord or agent is also prohibited from terminating a tenancy using the Section 21 procedure under the Housing Act 1988 (as amended) until such time that the monies are repaid.

The Bill reflects the current trend of increasing regulation in the private rental sector and increases the burden on landlords to ensure that their tenancies and properties are managed effectively.

How we can help

The Bill reflects the current trend of increasing regulation in the private rental sector and increases the burden on landlords to ensure that their tenancies and properties are managed effectively.

Ellisons will continue to provide updates as the Bill proceeds through Parliament and are able to advise both landlords and agents on how to manage their preparations and compliance with the ban once it comes in to force.

For more information please contact Joe Brightman or Craig Marshall.

Contact Our Dispute Resolution Team