On the 1st June 2019 the above Act came into force across England and introduced fundamental changes to the fees and charges that landlords, and/or letting agents, can seek to recover from a tenant.
Whilst the legislation applied to all new tenancies from 1st June 2019, it also includes all ongoing tenancies from the 1st June 2020.
What does this mean for your tenancy agreement that you have ongoing with your current tenant? In essence, the Act bans all payments from a tenant in association with renting a residential property, unless they are expressly permitted by the Act. Therefore any clause in a tenancy agreement, requiring a banned payment, will now be void from the 1st June 2020.
Examples of Prohibited Payments/Fees
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Tenancy Agreement fees
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Reference and Credit Check charges
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Inventory and check out fees
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Requesting ‘professional’ cleaning at the end of a tenancy
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Requesting chimney sweeping
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Requesting pool servicing, maintenance, opening and closing
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Requesting ‘professional’ clearing of gutters and drains
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Requesting gardening contractors to maintain grounds
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Requesting additional payments for pets ie. Pet deposits
Tenancy Deposit
The Act also capped deposits for all new tenancies at a maximum of 5 weeks rent (if the rent is less than £50,000 per annum) and 6 weeks rent (if the rent is £50,000 or more per annum)
However with an existing tenancy, which has already reverted to a Periodic Assured Shorthold Tenancy from 1st June 2020, there is no requirement to refund the different in the deposit held and the equivalent of 5 weeks rent. Therefore currently held deposits are not affected.
What are the permitted payments?
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Rent
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Actual utility costs
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Certain tenancy default fees
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Restricted fees for assignment/variation of a tenancy
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Early termination of agreement fees – again restricted under the Act
Consequences
Trading Standards are responsible for enforcing breaches of the Act. Each breach will be a civil offence, and carry financial penalties. There are further penalties for breaches including being unable to serve notices or banning orders for landlords.
The full details of the Act can be found at https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance
