What is the Tenant Fee Ban?

Prior to 1st June 2019, tenants looking to move into a new home faced additional charges known as ‘admin’ or ‘agency’ fees.

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These often cost hundreds of pounds, and letting agencies had relatively free rein to charge what they deemed necessary for their “admin” work. Thankfully, the Tenant Fees Act 2019 put a stop to extra fees for renters. 

Here’s what you need to know about the tenant fee ban. 

What is the Tenant Fees Act of 2019?

The Tenant Fees Act of 2019 banned agencies’ ability to charge tenants hidden fees and capped deposits to 5 weeks’ rent on houses for which the annual rent was less £50,000. The Act applies to assured shorthold tenancies, student accommodation and licenses to occupy housing in the private renting sector. Currently, the Tenant Fees Act is applicable in England and Wales, where the Renting Homes Act 2019, was passed in September 2019.

a couple moving house and unpacking boxes

What does it mean for tenants?

This is great news for tenants! Tenants no longer have to factor in this considerable cost on top of their holding and security deposits. This is especially good news for younger or first-time tenants moving house, as well as tenants who move around relatively frequently. Landlords and letting agents can no longer charge for things like viewing the property, referencing, or inventory checks.

Tenants also benefit from the deposit cap, especially in cases where multiple students live in a larger, more expensive house. In most cases, you will not be required to pay more than 5 weeks’ rent for your ‘tenancy’ or ‘security’ deposit. In every case, your landlord or agent must protect your deposit by using a government-backed deposit protection scheme within 30 days of your payment. 

How much will you save?

The average ‘administration fee’ was around £300-377, though some sources report fees of over £500. Needless to say, you are saving a pretty penny!

Will you need to pay any fees to rent a home?

Of course, agents and landlords do still require you to pay ‘fees’ such as your rent, Council tax and utilities. You will also be liable for paying if there are any changes to the tenancy (capped at £50 per charge), for early termination of the tenancy or to secure your home with a refundable holding deposit of up to one week’s rent. 

Your security deposit will also cost you up to 5 weeks’ worth of rent, unless your landlord utilises a deposit replacement scheme. This scheme would cost renters an average of 1 week’s rent (instead of 5), but it is nonrefundable. The landlord benefits from this because they don’t have to register with a deposit protection scheme, but they must make it optional for renters. Failing to do so could see them getting charged with a penalty of up to £5,000. 

Tenants may find the scheme beneficial because it lessens the up-front costs when renting a new home, but it will depend on individual financial situations as to whether it makes more sense to pay a smaller nonrefundable fee up front, or a much larger fee that will be paid back if there is no significant damage to the rented property. 

What happens if your landlord is charging fees?

If your landlord or letting agent is charging you non-permitted fees according to the Tenant Fees Act 2019, you have a right to question it and seek advice from the Citizen’s Advice Bureau. If the payment is definitely regarded as non-permitted by the Act, you can ask them directly to refund the payment. Further action should fall in line with relevant government advice.

It’s important to know your rights as a tenant, and to make sure you’re getting a fair deal. Before you agree to anything, remember the 4 Things to Check Before Renting a Property and move in with peace of mind, and a little extra cash in your pocket.

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