What Fees Can You Be Charged as a Tenant?
As a tenant of a rental home, it’s vital to understand what fees you can be charged – and just as importantly, what fees you cannot be charged by your landlord or the letting agent.
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There are clear and strict government guidelines put in place to regulate the activities of landlords and agents and what fees they can put forward to the tenants of the property, with the 2019 Tenant Fees Act being the most recent legislation to set out what fees can still be charged to tenants.
Following the 2019 Tenant Fees Act, it has become illegal for letting agents to charge fees for certain services to tenants, with most tenancy fees now dismissed. This includes a ban on charging administrative fees to renters (unless you are paying over £100,000 rent, per year) by letting agents for instance. Most tenancy fees have now been banned, however there are still a handful of services and fees that tenants can be charged for.
Rental income
The rent, as drawn out in the tenancy agreement. This is the most important and central fee that you will be charged throughout your tenancy, on terms set out in your tenancy contract.
Tenancy deposit
The refundable tenancy deposit is another key fee that you will be subject to as a tenant. The tenancy deposit is capped at 5 weeks’ rent if the annual cost is under £50,000, and 6 weeks’ rent if it’s over £50,000 per calendar year.
Holding deposit
The refundable holding deposit is an optional fee that you can pay to your landlord in order to reserve a property. The holding deposit can at most be equivalent to one weeks’ rent. It is important to note that from the date that the holding deposit is received by the landlord, it can be retained for a maximum of 14 days, after which the deposit is to be returned if no tenancy agreement is drawn up. The landlord will have the power to hold on to the holding deposit if you as the prospective tenant choose not to move into the property.
Utility bills
You may also be charged by your landlord for utility bills which include electricity, gas, water, broadband, etc. The bill will either be sent directly to you for payment, or alternatively the landlord could add it to the monthly tenancy fees, while always providing you with evidence for the fees.
However, landlords must always state whether or not you pay utility bills as part of the rent in the rental contract. On most occasions, utility bills will be separate from the rent and your responsibility.
Contract changes
Furthermore, you may be charged up to £50 for changes to the contract during your tenancy. This administrative fee covers any operating costs the landlord has when altering the contract.
Late rent payment fees
Late rent fees are also part of the remaining tenancy fees. You can be charged up to 3% above the Bank of England’s base rate for every day that rent is unpaid, and only after 14 days of failure to pay rent.
Property maintenance
Finally, as a tenant, you could be charged for repairs if you’re at fault for the damage. However, more often than not, the landlord covers the maintenance costs, unless it’s explicitly obvious that you are at fault for the damage.
There are however many fees that are strictly banned and that you should never be subject to paying. You should not pay any:
- administration fees
- reference check fees (used to check whether you are a viable tenant)
- tenancy renewal fees
- check-out fees
- or credit check fees (to determine your capability to pay rent)
All these fees usually range in price between £50-300 and falling victim to these illicit charges can easily set you back in excess of £1000. In addition, regardless of whether your tenancy contract was signed before the Tenant Fee Act was enacted (June 2019), you should not be charged for any of the banned fees after June 2019.
If you do find yourself being presented with banned or unreasonable fees by the landlord, they are not only obliged to return the money within four weeks subject to an additional £5,000 fine. Furthermore, you can report your landlord to trading standards, where they could be prosecuted and banned from renting out properties.
All in all, it is very useful to be aware of what fees you can be charged for as a tenant! In being knowledgeable and aware of your rights as a tenant with respect to tenancy fee payment, you can avoid paying excess fees and falling victim to surplus payments.
