 Fee ban could be in place by summer |
The Tenant Fees Bill,
which bans agents and landlords from charging tenants lettings fees, is on the cusp
of receiving royal assent and being passed into English law.
The bill made its way
through the Lord’s third reading in mid-January and yesterday passed amendments
in the Commons.
During the reading,
Lord Bourne of Aberystwyth said that, subject to the parliamentary
timetable, the intention was for
the bill to come into force on 1 June 2019
It will ban most
upfront fees for tenants and cap security deposits at the equivalent of five
weeks’ rent where the annual rent is less than £50,000, and six weeks if it is
over that amount.
The idea is that
tenants will be able to see the upfront the cost of a property in the
advertised rent without hidden charges for administration, renewal and checks. These
rules will also apply to online letting agents.
Default fees have been
allowed for limited charges to recoup the costs of, for example, lost keys.
However, some have argued it could provide a loophole for unscrupulous
landlords to ‘try it on’ and introduce a catch-all default fee within the
contract.
Agents and landlords
will also be able to charge for a change or early termination of a tenancy
requested by the tenant. They will also be able to charge for utilities, phone,
broadband and TV, and council tax.
The bill also creates
a civil offence with a fine of up to £5,000 for a first breach of the ban,
rising to £30,000 for repeat offenders.
Trading Standards, who
will be responsible for policing the ban, have up until six months following a
breach to take action. The act will also provide a means for tenants to recover
illegally charged fees through the courts (via a First Tier Tribunal).