Five Weeks on From the Start of the Tenant Fee Ban

Five weeks ago the Government introduced one of the most pivotal pieces of legislation to impact the Private Rented Sector in England - the Tenant Fees Act 2019 (TFA 2019).

There was a lot of discussion about the fact that the legislation had been badly thought out and that the statistics used as evidence in favour of the Fee Ban were in fact misleading. It will take 12 months to see the actual impact of the legislation, however, it is clear that there will be consequences for both letting agents and landlords.

  1. Tenants will pay more in the long run - rents will increase, pet rent will be charged

  2. Tenants do not have a full understanding of the transitionary period. Fees are still permitted in some circumstances until the 31st May 2020.

  3. Letting Agents need to be sure that their processes are in line with the Statutory requirements of the TFA 2019:-

    a. Treating the Holding Deposit correctly and ensuring that the relevant time-frames are adhered to - 15 calendar day “deadline agreement date” which can be extended providing icing the tenant/applicant is notified in writing and why it is being extended.

    b. Ensuring that Security Deposits are within 5 or 6 week cap for ALL new tenancies entered into from the 1st June 2019. That’s the easy part. Remember to adjust security deposits accordingly at renewal of tenancy. Tenants are surprised they are receiving refunds!

    c. Paperwork - Are all relevant documents TFA 2019 compliant? ASTs, Licences, Holding Deposit Forms / Application Forms MUST reflect the changes in legislation.

    d. The Fee Schedules displayed must adhere to the changes made by the TFA 2019 to the Consumer Rights Act 2015. If unsure what is meant to be displayed and how, seek assistance from the portals. Remember there are Permitted Payments which CAN be charged to tenants - ensure that these fees are displayed correctly and present in contracts.

    e. Cleaning is causing an issue. The reference to “professional” cleaning of any kind is prohibited by law. This does NOT mean that tenants are not required to clean, they cannot force a tenant down the route of having to use a professional cleaner/oven cleaner/carpet cleaner/chimney sweep . if a property is NOT of a high enough standard when the tenant vacates, the relevant procedures will still apply - deposit deductions based on quotes where applicable.

    f. Handing back the Holding Deposit in certain circumstances. Be sure to keep a very clear and precise audit trail to illustrate why the Holding Deposit will be retained.

In the future there will be case law because a landlord or letting agent has made a mistake in relation to fees. The key is to be as precise as possible when dealing with any element of the Fee Ban and if in doubt do not try to second guess what needs to be done.