A consumer group says that the Tenants Fees Bill - which will eventually ban letting agents’ fees levied on renters - has a clause which is open to abuse.
Citizens Advice says the provision in the draft version of the Bill - which says tenants could be required to pay these fees if they default on part of their tenancy agreement by paying their rent late or breaching a condition in their contract - could be exploited by landlords or letting agents.
It says that the fees which the government wishes to abolish (which CA claims includes charges for inventory checks and exit fees) will simply be written into tenancy contracts and reframed as breaches of agreement if the tenant refuses to pay.
“The government’s pledge to ban fees paid by renters is absolutely right. Yet this goal risks being fundamentally undermined by a loophole that could be used by unscrupulous landlords and agents to charge tenants fees through the backdoor” claims Gillian Guy, chief executive of Citizens Advice.
The same issue was amongst those picked up by the Select Committee on Housing, Communities and Local Government, which reported last week - the committee’s comments were reported on Letting Agent Today at the time.
Guy claims: “The committee recognises that default fees are open to abuse, but their solutions do not go far enough. Each month renters are paying more than £13m in unfair and unaffordable fees, which would mean a total of more than £200m since a ban was first announced in November 2016.
“The government must act quickly and commit to removing this default fees clause, creating a Bill that will achieve its aim of a fairer and more affordable lettings market.”