A new government bill to ban letting fees across England was introduced into Parliament yesterday (2 May).
The Tenant Fees Bill could save tenants around £240m a year, according to government estimates. The Bill aims to make renting fairer and more transparent, as previously there has been little regulation on the charges faced by tenants.
Letting agents will be prevented from exploiting their position as intermediaries between landlords and tenants, as the Bill will put an end to unfair practices, such as double charging for the same services.
If you don’t feel your letting agent has done its job properly, there are steps you can take to complain about your letting agent and get help to resolve the dispute.
Key measures of the Tenant Fees Bill
The Bill will also give tenants greater assurances that the deposit they pay at the start of the tenancy can’t exceed six weeks’ rent.
Other key measures in the Bill include:
- Capping holding deposits at no more than one week’s rent The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- Capping the amount that can be charged for a change to 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 past 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.
- Prevents 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 property portals such as Rightmove and Zoopla.
- Local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement.
The number of people privately renting in the UK is at a record high. With the cost of rent soaring across the country, it pays to know your current rights as a private tenant.
When landlords can charge tenants fees
Alongside rent and deposits, the Bill outlines agents and landlords will only be permitted to charge tenants fees associated with:
- A change or early termination of a tenancy when requested by the tenant
- Utilities, communication services and council tax
- Payments arising from a default by the tenant such as replacing lost keys.
When will the Bill become law?
The new measures are subject to Parliamentary timetables and will be introduced in law next year.
Rt Hon James Brokenshire MP, housing secretary, said: ‘The government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.’
The Bill builds on government’s wider work in the lettings sector where it has introduced a new rogue landlord database, banned orders for rogue landlords and property agents, and introduced a new code of practice to regulate the letting and managing agents sector.