Don't forget - Tenant Fees Act in force from Monday!
Mary-Anne Bowring 28/05/2020
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The Tenant Fees Act applies to all tenancies in England from Monday 1 June Landlords. From next week, the Tenant Fees Act 2019 applies to all your tenancies and you are banned from charging renters any fees apart from those specified in the legislation. That's rent, tenancy deposits, holding deposits, and any default charges that are specifically stated plus a few others we list below. The Act came into effect in England on 1 June 2019 with a one-year transitional period, which exempted existing tenancies from the new rules. This is about to end. So from Monday 1 June, all assured short-hold tenancies and HMO licenses are subject to the legislation. The legislation also introduced a deposit cap that limits deposits to five weeks’ rent (or six weeks if the annual rent is £50,000 or more). To remind landlords of the rules, here’s a list of allowable charges:
- A refundable deposit
- A refundable holding deposit - capped at one week’s rent
- Rent, utilities, communication services, TV license and council tax
- Fees for changing or ending a tenancy at the tenant’s request
- Default fees for late payment of rent
- Fees for replacing a lost key or security device, where required under a tenancy agreement and with evidence of the cost in the form of a receipt or invoice.
If landlords charge for anything that isn’t on this list, that's a breach of the new legislation. This carries a fine of up to £5000. And even worse, if you break the rules again within five years of being fined the first time, that counts as a criminal offense and carries an unlimited fine. So make sure you understand the new rules. For a full list of charges that are now banned under the legislation, you can read the Government guidance in full here. Finally, it’s worth remembering that any deposit taken before 1 June 2019 that was higher than the five or six-week cap that is now in place, doesn’t need to be refunded immediately. Instead, renters should receive a refund at the end of the tenancy. The new tenancy deposit cap will apply to any new tenancy agreed after this. www.planetrent.co.uk
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Under Offer: This term applies to a property where the landlord is considering an offer but remains on the market. It implies that further offers may still be considered until the landlord formally accepts or declines the current offer.
Let Agreed: This term indicates that a landlord has provisionally agreed to enter into a rental agreement with a prospective tenant, pending additional checks and referencing. It doesn't require the prospective tenant to have paid a holding deposit.
Let: This term signifies an established binding rental agreement between the landlord and tenant.
For both lettings and sales, the guidance addresses additional terms:
New On The Market: This term is used for a property not advertised since its last sale or rental. It should only be used for a brief period.
New Instruction: It applies to a property assigned to an agent for marketing recently, even if it was previously listed with another agent without being sold or rented.
New and Exclusive: This term refers to a property that is either new on the market or a new instruction, exclusively available through a specific agent or portal.
New Method of Sale/Let: This term is used when a property is being marketed for sale or rent using an alternative approach to the original advertisement, such as transitioning to an auction or sealed bid.
Reduced: This term indicates that a property's price has recently been reduced. The reduction should be genuine and comply with the Chartered Trading Standards Institute's guidelines on pricing practices.