Monday marks the one month anniversary of the Tenant Fees ban coming into force, but a senior London agent warns the real effect is yet to be felt.
Chestertons’ head of tenancy services, Donna Ingram-Fletcher, believes that many landlords are still unaware that the ban will also apply to historic tenancy agreements that will be ending over the course of the next few years.
“As the legislation is enforceable on all Assured Shorthold Tenancy agreements, landlords don’t just need to adjust, they need to get to grips with the complexities involved with unravelling existing tenancies. A large number of landlords are likely to still be in the dark that sections referring to extra costs on agreements drawn up before June 1 2019 may not be binding when it comes to a tenant moving out of a property, or once the tenancy renews” she says.
“Many landlords are unaware that if a tenant moves out after May 31 2020 costs cannot be charged to the tenant, even if these were written in to a tenancy agreement” adds Ingram-Fletcher.
She says landlords could be in for a shock next June when services – such as an end of tenancy professional clean – cannot be charged to the tenant despite a clause in the contract. And she believes the wording of tenancy agreements is therefore more important than ever to ensure peace of mind and prevent landlords from being caught out.
“The government’s ‘one size fits all’ policy also means landlords and tenants of certain building types are adversely affected by the changes. For example, the dominant building type in prime central London areas, the mansion block, is proving to be tricky. These blocks rely on whole-building, centralised facilities – such as heating systems – which historically were charged to tenants based on average use” she explains.
“Tenants can now only be charged for specific usage of such utilities and in many cases such additional tenancy costs will now be added onto the rent, and agreements updated to reflect this at the point of renewal. Should the average costs to the landlord at the end of the year exceed the amount recouped via the rent, the landlord will have to accept this as a loss.”
