Written by Andrew Truglia
From June 1st this year, the Tenant Fees Act came into effect. Renters starting a new tenancy agreement, or renewing a current one, on or after this date, shouldn’t have been charged for agency fees.
According to the Government, the only permissible charges under the Act are as follows:
- A refundable deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- Payments associated with early termination of the tenancy, when requested by the tenant
- Payments in respect of utilities, communication services, TV licence and Council Tax
- A default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
Whilst the law is now in effect, and is punishable with heavy fines and even bans from letting property for repeat offenders, some property adverts still display fees and some tenants have reported being asked to pay fees not included in the above list.
If you believe that you have also been unlawfully billed, we have gathered together this information from the Government for you to follow:
- Double check what you are being charged for. That deposit may sound high, but your landlord may have opted for the maximum of 5 weeks’ rent. Follow our guide to working out five weeks’ rent, if the deposit is higher than this number then you are being overcharged. Also, make a point of clarifying exactly what each charge is. Some rental agreements may give the above fees different names.
- Contact your landlord or letting agent. They may not have updated their systems to remove banned fees or may not even know about the change in the law. Give them the benefit of the doubt and make sure they know this before taking the issue any further.
- After speaking to your landlord or letting agent, and determining that the fee was unlawful, they should agree to cancel the charge if you haven’t already paid it, or arrange a refund if you have. Request a repayment immediately using the Government’s draft letter found here. Any response other than an agreement to repay would warrant taking the case to the next step.
- Gather your evidence. This could include any bank statements, receipts and invoices that prove that you have paid an unlawful charge or any other paperwork that proves that you have been asked to pay one. Keep a record of any correspondence, e.g. texts, emails, or notes that you made during or shortly after a conversation.
- Contact the relevant authority. Citizens Advice will be able to help you determine whether the fee is truly unlawful and whether it is your landlord, the letting agency, or both that are at fault. Letting agency complaints should be directed to the Redress Scheme whilst issues with landlords will be dealt with via your local Trading Standards authority, who may take your case to the First-Tier Tribunal.
The Tenant Fees Act is a sweeping piece of legislation that has made huge progress in simplifying what was a confusing area for both tenants and landlords. Now that it is written into law, the job of identifying an illegal fee is much easier, meaning that there is a high chance that if you believe you are being unfairly charged, then you’re probably right. If there is any doubt at all, it is always worth contacting Citizens Advice.
As for landlords and letting agents, you should be doing everything you can to ensure that your agreement complies with the new law. The government has not informed those affected, they are simply meant to keep up to date with changing laws. Donna Ingram-Fletcher of Chestertons believes that for many landlords, it is unclear whether they are included in the changes, especially if the tenancy agreement began pre-June 2019:
“The Tenant Fees Ban could prove to be a headache for landlords for the next two to three years as many are still unaware that the ban looks back as well as forwards. As the legislation is enforceable on all Assured Shorthold tenancy agreements, landlords don’t just need to adjust, they need to get to grips with the complexities involved with unravelling existing tenancies. A large number of landlords are likely to still be in the dark that sections referring to extra costs on agreements drawn up before June 1 2019 may not be binding when it comes to a tenant moving out of a property, or once the tenancy renews.
“Many landlords are unaware that if a tenant moves out after 31 May 2020 costs cannot be charged to the tenant, even if these were written into a tenancy agreement. Landlords could be in for a shock next June when services – such as an end of tenancy professional clean – cannot be charged to the tenant despite a clause in the contract.”
Instead, landlords will only be able to deduct from the initial deposit for these costs and must bear in mind that the deduction must be justifiable, and evidenced if challenged by the tenant. In these changing times, landlords must take nothing for granted and ensure that they comply with new laws at every opportunity.