The Tenant Fees Act will come into force on 1 June 2019, having received Royal Assent on the 12th February 2019.
At a glance:
- Most fees charged by landlords and their agents to tenants will be banned, apart from a number of ‘permitted payments’.
- The ban will apply from 1 June 2019 for new and renewed Assured Shorthold Tenancies and licences to occupy. It will apply to pre-existing tenancies from 1 June 2020.
- Landlords and their agents must ensure that their practices are compliant. Tenancy agreements should be reviewed to ensure they do not charge or refer to any prohibited payments.
The Act aims to deliver the Government’s manifesto commitment to ban landlord and letting fees paid by tenants and improve fairness, competition and affordability in the lettings sector. The Government announced its intention to ban fees in the Autumn Statement in 2016, following the private members bill proposed by Baroness Grender, the Liberal Democrat peer. The Government estimates that the Act will save tenants around £240 million a year in letting fees, which will come from letting agents’ fees (£160m) and knock-on costs to landlords (£80m).
The ban will apply to both Assured Shorthold Tenancies and licences to occupy. It does not cover long leaseholds, tenancies of social housing or holiday lets.
While the ban on fees initially applies to tenancy renewals, statutory periodic tenancies and new tenancies it excludes contractual periodic tenancies that arise after 1 June, the fees ban will be applicable to pre-existing tenancies from June 2020. Therefore, any fees charged to tenants after this date must comply with the Act otherwise they could make notices, such as section 21 notices for Assured Shorthold Tenancies, ineffective.
Any reference to landlord in this briefing note also includes their agents. Also the letting agent requirements will apply to landlords who let their own properties.
Download our paper to read further information on the Tenant Fees Act, including our coverage of the following topics:
- Charges which landlords will be prohibited from charging
- Permitted charges which a landlord / agent can make to tenants
- Letting agent requirements
- Penalties and enforcement
- Rent controls and what is not in the Act
- What S&P is doing – from Kate Eales, National Head of Lettings