A ban on tenant fees, including admin and agency fees
The Tenant Fees Act came into force on 1st June 2019. It bans most letting fees and caps tenancy deposits paid by tenants in the private rented sector in England and is designed to protect you from hidden costs when renting.
The ban on tenant fees applies to new or renewed tenancy agreements signed on or after 1 June 2019. Landlords or agents can now only charge tenants for:
- Refundable tenancy deposits capped at no more than 5 weeks' rent for annual rents under £50,000
- Refundable holding deposits capped at no more than 1 weeks' rent for annual rents under £50,000
Your landlord/agency can no longer ask you to cover the cost of referencing, check-in, inventory or any admin fees relating to new or renewed contracts.
The Three Exceptions
There are three exceptions:
Late Rent Fees
Landlords can still charge fees for rent payments that are over 2 weeks late. These are a maximum of 3% plus the Bank of England base interest rate, annually.
Landlords can still charge tenants for losing their keys (or other security device if your property is high-tech). They should provide you with evidence of the cost. These fees need to be included in your written tenancy agreement for your landlord or agency to be able to charge them.
Changes to Tenancy
Landlords can charge up to £50 for making changes to the terms of the tenancy. This includes for example, adding a new tenant or allowing a pet. This exception doesn’t apply to renewals or changes to the length of the tenancy.
If your landlord or agent ignores the ban on letting fees, they will now face a fine of £5,000, which could increase to £30,000 for repeat offenders or result in a criminal offence.
New Rules to Holding Deposits
Tenancy or security deposits are limited to 5 weeks' rent for annuals rents under £50,000. Refundable holding deposits are limited to 1 week's rent for annual rents under £50,000.
Landlords or agents must return your holding deposit to you, either in direct payment, by putting it towards your first rental payment, or with your security deposit.
In the following cases the landlord can keep the holding deposit:
- You decide to withdraw from the proposed agreement
- You failed to take all reasonable steps to enter into the tenancy agreement
- You failed a Right to Rent check
- You provided misleading information which affects your suitability to rent the property
Repayment of Holding Deposits
Landlords can only hold your holding deposit for 15 days unless another ‘deadline’ date is agreed in writing.
After the deadline, the holding deposit must be refunded in full within 7 days.