homeWednesday 30th September 2020

Reforms of private rented sector

Katie Coyne13/09/2018 - 13:43

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London Renters Union protest
London Renters Union protest

Changes the private rented sector continue with the publication of the Rugg report into the sector the Tenant Fees Bill and rumours around three-year tenancies.

The Tenant Fees bill will ban letting agent fees and introduce hefty fines and civil penalties for ban breaches. A new criminal offence has been created to tackle repeat offenders.

Holding deposits will be capped at one week’s rent, which are returnable if the deal doesn’t go through, and security deposits capped at six weeks.

Other measures include ensuring landlords and letting agents only charge for reasonable incurred costs by making them provide evidence of these costs before imposing charges. The law will prevent them from over-charging for minor work, like replacing smoke alarms.

The bill is scheduled for its second reading in the Lords next month.

CIEH housing manager Tamara Sandoul said: ‘We are pleased to see the Tenant Fees Bill nearing completion, as this brings tenants one step closer to having unfair agents’ fees being scrapped. There has been almost universal support from the housing sector for this ban on fees.’

However, there are concerns that ‘default fees’ contained within the bill may provide a loophole to introduce additional and unwarranted fees.

Sandoul added: ‘We have expressed some concerns, along with other organisations, that default fees could be used by some agents to charge fees through another route.

‘Default fees allow agents to write specific fees into the contract. This is intended to cover for scenarios like lost keys where the tenant should be liable. But we could see a situation in which a landlord could write something that may be unreasonable into the contract.’

‘These fees have to be detailed in the tenancy agreement, which potentially opens the gate for very long and complicated contracts, which of course will not always be read properly by the tenant.’

The government’s consultation on introducing three-year tenancies concluded last month. CIEH backed three-year tenancies and argued that they should be mandatory. It was dismayed at stories in the media saying that the Treasury and ministers at No 10 are seeking to water down the proposals.

Sandoul said 'The wording in the consultation document asked whether new longer three-year tenancies would be introduced on a voluntary basis, allowing each landlord to choose whether to offer these to his or her tenants. 

‘We feel that longer tenancies should be offered as an option to all tenants.We are concerned that most landlords would simply not want to offer such tenancies. Also, a voluntary system would put landlords who do adopt it at a disadvantage as their ability to evict tenants and raise rent would be limited. With a mandatory system, landlords would find themselves on a level playing field.

*Picture: The London Renters Union protested outside a member’s house in West London at the end of August and successfully prevented them from being evicted.

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