OpenRent Community

Tenant Fees Act (2019): What Landlords Need to Know

Originally published at: https://blog.openrent.co.uk/tenant-fees-ban-what-landlords-need-to-know/

The Tenant Fees Act came into force on 1st June 2019 and extended to over all tenancies on 1st June 2020. At the centre of the new rules is a ban on tenant fees, including admin and agency fees. All tenant payments are now prohibited by default, Only payments specifically permitted by the Act can be…

Hi Sam,

I am hoping to start a new tenancy agreement for a flat. The current tenancy is coming to an end. However, one tenant is planning to stay and I will start a new tenancy with them. As a result, the agency is charging a £50 admin fee for change in sharer. I assume this is illegal as we are a starting a new tenancy agreement.

Thank you
Safa

Hi, yes that would be a prohibited payment under the Tenant Fees Act.

You could report this to your local authority’s trading standards team.

Sam

1 Like

Hi Sam,
I have read the following on an advertisement:
‘NO DEPOSIT PAYABLE OR APPLICATION FEES* All you pay to move in is a Holding fee equivalent to 1 weeks rent to reserve the house , this is then credited towards your first month’s rent. You must then pay 1x month’s rent on the day you move in + a service fee equivalent to one weeks rent (7 days) plus VAT to Let alliance Nil Deposit Scheme.’

Is the ‘Service Fee’ allowable???
Thanks and regards, A.

Hi Antje,

Lucky Sam is on holiday and has taken all his specialist knowledge with him - so I don’t have all the answers for you. What I do know is that deposit replacement schemes are allowed and they can charge these costs - but they could have worded it in a much better way that wouldn’t raise questions over whether or not they were in breach of the TFA.

Gillian

Lucky Sam indeed!

Thanks Gillian!
Does one have to agree to the deposit replacement scheme? That week worth of rent is basically gone whilst you would get your deposit back unless something goes really wrong…
Thanks! Antje.

That’s an interesting question. I’ve just consulted MyDeposits and their advice is that you don’t need to agree. You must be given the choice between the replacement scheme and a refundable deposit. To quote them…‘Landlords and agents cannot make it a requirement for tenants to use a deposit replacement product, as the upfront charge will be seen as a prohibited payment.’

1 Like

Many thanks again Gillian!
Have a nice weekend! Antje.

3 posts were split to a new topic: End of contract fees

A post was split to a new topic: When is deposit and first month’s rent payable?

Hi,
I am currently in a 12 month contract but want to end it early (around 6 months into it). I have been informed i need to find a new tenant to replace my liability or I will be charged for the rent until a new tenant takes my place (which is fine and I agree with that). However, I am also being charged (or told I will be when they find a new tenant) around £680 in fees such as ; costs to reassign, admin and referencing fees and the cost of check in and check out. I know you can’t charge these fees normally but are they allowed to charge those fees to me for the new tenants?
Thanks for any help.

The landlord or agent is allowed to charge their actual costs for ending one tenancy, finding tenants and starting a new one. You could challenge the cost as that does sound quite high, but I bet they will come up with a rationale. They can also just refuse to allow you to end the contract so I think you should wait until nearer the time before asking for a breakdown of costs.

Sam’s comment at the start of this thread are: The Tenant Fees Act came into force on 1st June 2019 and extended to over all tenancies on 1st June 2020. Can I just check - does that mean that I can no longer ask my tenant (who entered into the contract in May 2019) to pay for the inventory check-out? Or does this just apply to new tenancies?

You cannot pass those fees to tenants anymore as the TFA now applies to all tenancies

1 Like

Thanks, that is what I thought - that clause in the contract is redundant! I didn’t want to believe it though!!

Deposit is 5 weeks max
Rent is whatever they ask for but it has to be the same amount every month you can’t pay more in the first few months and then it is reduced ( you can’t frontload rent)
So yes they can ask for it upfront
We do for tenants without guarantor eg international tenants