Landlords told to be prepared for tenant fees ban

Landlords are being advised to be prepared for the letting fees ban, which comes into effect in two weeks.

All payments will be prohibited unless they are specifically allowed. Landlords who don’t follow the rules will be fined, with a restricted list of the payments that are allowed coming into force.

Agents must be compliant with the new law, with the Association of Residential Letting Agents (ARLA) supporting its members with tools for the transition.

ARLA is also running a series of roadshows, where they will update attendees on the new legislation and how to adapt to the changes.

David Cox, Chief Executive of ARLA, said: “We urge members to attend as we rapidly head towards 1 June. Agents can help reduce the impact on their business by being prepared and with the date fast approaching, they must act now.”

If landlords overcharge tenants, this could be regarded as an offence, even if the landlord immediately corrects the overcharging.

The onus for enforcement comes to local councils, and there have been warnings that some tenants could try to take advantage of this. With fines of up to £30,000 and the risk of being known as a ‘rogue landlord’, the punishment can be severe.

The payments that can be made in connection with a tenancy under the Tenant Fees Act are;

  • Rent
  • Refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
  • Refundable holding deposit capped at no more than one week’s rent
  • Payments associated with early termination of the tenancy, when requested by the tenant
  • Payments to change the tenancy when requested by the tenant capped at £50, or reasonable costs incurred if higher
  • Payments in respect of utilities, communication services, TV licence and council tax; and
  • A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement