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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

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?