Tenant Fees Act

Overview

Tenant Fees Act 2019

This page give a brief overview of the Act. Detailed guidance can be found her:

Government Guidance on the Act

The Tenant Fees Act 2019 (“the Act”) places controls on what payments landlords and letting agents may require tenants and relevant parties (such as guarantors) to pay, whether to themselves or to third parties. It takes effect from 1 June 2019.  (There were some transitional provisions relating to existing tenancies. However, from 1 June 2020 the Act became fully in force - see further below).

Importantly, the Act applies specifically to:

  • Assured shorthold tenancies;
  • Licenses; and
  • Certain student lettings. All of these are considered to be “tenancies” for the purposes of the Act.

In essence, the Act works by prohibiting any and all payments “in connection with a tenancy of housing in England” (it does not apply to Wales), save for those payments that are expressly permitted under the Act.

Should a landlord or letting agent require a prohibited payment from a tenant:

  • The penalty for a first offence is a fine of up to £5,000.00; and
  • A second offence within five years is a criminal offence and can carry a fine of up to £30,000.00. This is also an offence that permits a local housing authority to apply for a banning order under Section 15(1) of the Housing and Planning Act 2016.

Overview of permitted payments

  • Rent - subject to the restriction that there not be a variable rent rate to disguise hidden fees.
  • Tenancy deposits: Save that these are limited to no more than 5 weeks’ rent where the annual rent is less than £50,000.00 per annum. Above £50,000.00 no more than 6 weeks’ rent is permitted;
  • Holding deposits: Subject to a strict handling procedure, and that these are limited to no more than 1 week’s rent.
  • Payments in the event of a default, variation, assignment, novation or termination of a tenancy, all subject to various restrictions.
  • Payments in respect of Council Tax, utilities etc., television licenses and communication services, all subject to various restrictions.

Transitional Provisions

The Act has applied to all new tenancies and renewals granted from 1 June 2019. Where a fixed term assured shorthold tenancy was granted before 1 June 2019, the Act did not apply to a statutory periodic tenancy arising upon its expiry after that date. However, from 1 June 2020:

  • Any provision of a tenancy granted before 1 June 2019 that would have been prohibited had it been granted on or after that date, will cease to be binding on the tenant and/or other relevant parties;
  • If the landlord accepts a payment pursuant to such a provision, it must be returned within 28 days or the landlord or agent will be treated as if they required the payment to be made, which will constitute an offence under the Act.
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