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TODAY'S OTHER NEWS

Tenants Fees Bill is now law as clock ticks down to June 1

The Tenants’ Fees Bill has now become law, receiving formal Royal Assent yesterday afternoon - and within minutes, the government issued a press release boasting about the measure.

The statement confirms that tenancy deposits will be capped at five weeks’ rent, and that the new rules come into effect on June 1.

The measure, says the government announcement, “puts an end to costly fees imposed by landlords or agents … It is expected to save tenants across England at least £240m a year, or up to £70 per household.”

Communities Secretary James Brokenshire MP says: “Tenants across the country should not be stung by unexpected costs from agents or landlords.

“This Act not only delivers on our promise to ban letting fees but also caps deposits at five weeks’ rent and sets out how and when landlords can charge tenants fees – helping renters keep more of their hard-earned cash.

“This is part of our ongoing action to make renting fairer and more transparent and make a housing market that works for everyone.

“Under the Act, landlords and agents are only able to recover reasonably incurred costs from tenants and must provide evidence of these costs before they can impose any charges.

“This will put a stop to, for example, tenants being charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace – such as £60 to replace smoke alarms.

“The Act also ensures that tenants who have been charged unfair fees get their money back quickly by reducing the timeframe during which landlords and agents must pay back any fees that they have unlawfully charged. Taken together, these provisions help reduce the costs that tenants can face at the outset, renewal and termination of a tenancy.”

In summary, the new Act is: 

- capping security deposits at no more than 5 weeks’ rent and holding deposits at no more than 1 week’s rent. It also sets out the proposed requirements on landlords and agents for returning a holding deposit to a tenant;

- capping the amount that can be charged for a change to a tenancy at £50 unless the landlord demonstrates that greater costs were incurred;

- creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last five years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution;

- requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal;

- preventing landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees;

- enabling the appointment of a lead enforcement authority in the lettings sector;

- amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to online property portals such as Rightmove and Zoopla;

- enabling local authorities to retain the money raised through financial penalties with this money reserved for future local housing enforcement.

You can see all the official documentation relating to the Act here.

Brokenshire claims that the act - first announced in November 2016 - is part of a wider package of government reforms “aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, better quality and more affordable private rental market.”

He says: “We have introduced a range of powers for local authorities to enable them to crack down on the small minority of rogue landlords and agents who let unfit properties. This includes fixed financial penalties of up to £30,000 and banning orders – possibly for life – for the most serious offenders.

“Ministers have also extended mandatory licensing for Houses in Multiple Occupation to improve living conditions of tenants in shared homes and tightened up rules on smoke and carbon monoxide detectors. 

“Private tenants can also apply for a refund of up to 12 months’ rent if their landlord does not deal with health and safety hazards in their home.”

  • SCN Lettings

    So £60 is an excessive amount to replace a smoke alarm? Okay you can buy a cheap battery one for £6. But who is going to fit it? Most tradesmen charge a £50 call out. So yes £60 to replace a smoke alarm is excessive...by £4. And what happens if it's a wired unit damaged by a tenant? Cost more than £60 to replace one of those. Brokenshire you don't have a clue mate.

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    These are my thoughts exactly. It's not just a case of buying a replacement item its the costs involved with having the item fitted/replaced.

     
    S l
    • S l
    • 13 February 2019 10:09 AM

    actually, the local authority had imposed wired smoke alarm 3 years ago and not allow cheap battery ones anymore. brokenshire claimed they are aiming for fairer more affordable housing. however, they causing the exact opposite results with increase rents as a consequences of their actions.

     
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    Back up a minute; for the last few months its been raining comments about tenant fees up in the £100's, now suddenly its only going to save £70 per household? The only good thing about this is that Trading Standards won't put any effort into policing this anymore than they do rogue agents and landlords

  • Andrew Hill

    17 mps received 7 page letters from us about the ramifications of tenant fee ban.

    Not a single response.

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    It's not going to save tenants anything, in fact it's going to cost tenants because landlords are going to put their rent up.

  • Kathy Taylor

    Stop the press! "Up to £70 per household"?? What a massive saving - not. No doubt they will be paying more than that once Landlords increase rents to cover their increased costs. And what about the VAT that the government is going to lose on all the fees?

  • phil dillon

    This is Politics you dont actually think they care about Tenants do you. They dont care about the PRS. They are all in it with their mates in the Build to Rent sector, Eton Mess on the way!!

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    Not sure I really care one jot.

    Reason: I have a very rentable house and I will therefore just put up my rental to cover all these stupid Government attempts at getting tenants cheaper deals. The only thing that will change that is if the Government builds more houses. Patently they have not delivered that promise for over 10 years. And never will.

    They have proven now that all that will happen is they have introduced these laws that will do EXACTLY the opposite of what they planned. Tenants will, no doubt, now be paying more.

    What cretin ever thought this would work? And when will they think?

    Indeed, with careful planning I will make even more than I did before.
    So...Thank you very much Mr. Brokenshire. You are my hero.

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    £70 Pmsl.

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    So the saving is £70 per tenancy when the rent goes up by £20 pcm and the average tenabcy is 2.5 years the tenant will be £530 worse off, have I missed something WTF

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    Sadly as an Industry we have been let down by :-
    a) our Government who clearly don`t live in the real world that we do,
    b) the so called industry bastions that supposedly represent our Industry. I`m not sure I`d want ARLA NALS or any such entity negotiating my house sale for me. What real influence or effect have they really had here to represent our interests?
    c) the failure of Local Authorities to properly enforce much of the raft of legislation that has been created over the last ten years thus encouraging a breeding ground for poor quality Landlords and Agents

    Do the Government realise how difficult it is to rent a house if you have pets already before introducing their 5 week deposit brainwave? The RSPCA and Battersea very sadly are inevitably going to be busier as a result.

    Have the Government thought about those who want a short term six month let? Most Landlords now costs wise will want a longer term let to get value for the fees they will be paying.

    Show me an Agent that can re-let a property, redo the paperwork, referencing and Inventory for £50? Why would any Landlord sanction a change of any sort against that backdrop.?

    Yet more evidence that our Housing minister and the minions that serve have very little understanding of what we reputable agents actually do for a living and the real world in which we live.

    How this benefits a tenant in the long term is hard to see.

    Meanwhile while we are refining our business to become more efficient we are forced to engage with `time hoovers` that don`t share those values... HMRC, DPS, TDS, etc etc

    If the property market is indeed broken then sadly my conclusion is that those responsible for it in the corridors of power are equally so.

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