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Headline Restrictions in the Tenant Fees Act

9th Apr 2019

Category: Property headlines

Tagged:Legislation, Tenant Fees, Tenant Fee Act

You’ve probably heard by now that the Tenant Fees Act will come in to force from 1st June 2019. The Act has far-reaching implications for the rental sector. We recommend all landlords familiarise themselves with the provisions of the act as it puts significant restrictions on both landlords and agents.

Here are some of the headline items:

Restrictions on Payable Items in Connection with a Tenancy:

In short, with the exception of exempt fees (such as holding deposits, deposits and rent), all tenant fees are now banned. This includes charging a tenant for guarantor forms, credit checks, inventories, cleaning, references, gardening and administration.

Other Restrictions on Payments:

  • A landlord can only charge default charges for loss of keys and interest on late rent payments after 14 days. It is worth noting that this may be a significant increase in exposure to the likelihood of tenants defaulting on their rent.
  • The Act introduces restrictions on charges for changes to terms of the tenancy during the term.
  • Payments to third parties are banned, with the exception of utility and communications providers.
Restrictions on Deposits:

The Act introduces restrictions to holding deposits. The landlord will have 15 days to decide whether they would like to proceed with the tenant’s application from the time of payment. Regardless of whether the tenancy goes ahead, the landlord must repay the deposit within 7 days of the deadline being reached. The landlord will not have to repay the full holding deposit if the tenant does not provide the correct information within the time period, provides false information, or fails referencing checks.

There will now be a cap on all tenancy deposits of 5 weeks rent. If the annual rent is over £50,000 the cap is 6 weeks rent.

If you’d like to read the Act in full you can find it here.

Hannah Walkden

Marketing Assistant

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