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February 9, 2019

Real Estate

What is the latest on the Tenant Fees Bills?

The Tenant Fees Bill has passed through both the House of Lords and had its last reading in the House of Commons, meaning only the formality of receiving Royal Assent stands between it becoming an act of parliament.

This means that from 1st June 2019, under the new Tenants Fees Act 2019, agents will not be able to charge fees when setting up or renewing a tenancy agreement. Earlier this year, the House of Commons approved some amendments which the House of Lords set out. so it will be interesting to track its progress once it becomes law. For now at least, it is being cheered by charities such as Shelter as a good day for those in rented accommodation.

The final bill will see default fees limited to replacement keys and late rent payments only, caps on holding deposits of no more than a week’s rent and security deposits capped at five weeks’ rent. It also will make it a civil offence with a fine between £5,000 for a first offence and up to £30,000 for repeat offenders who do not meet the requirements laid out in the bill.



Hefty fines

In addition, agents and landlords will only be allowed to charge fees to tenants in association with changing or terminating a tenancy agreement early (only when requested by the tenant), utilities, communication services and council tax and areas where the tenant is at fault, such as losing a key. While the Bill is being hailed as a key victory for tenants rights by many, it has not been without controversy. Some in the industry feel it does not give agents and landlords enough time to prepare ahead of the June deadline. While the Bill is being hailed as a key victory for tenants rights by many, it has not been without controversy. Some in the industry feel it does not give agents and landlords enough time to prepare ahead of the June deadline.Others feel landlords and agents will now have additional costs to absorb. This means they will need to look at other ways to save money, such as using property inventory software such as inventorybase.

Potential rent increases

Others warn that the Bill will mean tenants are charged extra rent to make up for the shortfall in fees, as reported here https://www.thesun.co.uk/money/8322426/letting-fee-ban-push-up-rents-more-than-100-a-year/. Costs will just be passed on as rent increases throughout the tenancy term instead of being charged upfront.

It is too early to say exactly how the Bill will impact on landlords, agents and tenants alike, so it will be interesting to track its progress once it becomes law. For now at least, it is being cheered by charities such as Shelter as a good day for those in rented accommodation.