This month the Government has published the draft Tenants Fees Bill following consultation.

This draft Bill will prohibit letting agents imposing any fees over and above rental payments, the only exceptions to this are holding and security deposits.

Key points to note are:

  • Holding and security deposits will be capped at no more than one week’s rent
  • Security deposits at no more than 6 weeks rent
  • Any charges to tenants in default (e.g. late payment, key replacements)
  • There are also requirements for landlords to return holding deposits

The legislation will be enforced by Trading Standards Departments and penalties for non-compliance range from a £5,000 civil penalty for an initial breach, and a criminal offence where a person has been fined or convicted of the same offence within the last 5 years, up to a maximum of £30,000 civil penalties.

It was anticipated that the legislation would come into force in April 2018, although it has now been indicated the commencement date may be delayed until 2019.

In the meantime, letting agents should not be complacent, The Property Ombudsman has launched phase three of its national campaign with our partners The Chartered Trading Standards Institute (CTSI), clamping down on letting agents who are not displaying their fees.

The Consumer Right Act 2015 requires agents to prominently display fees, both on their premises and on their websites. However, there are still many letting agents who are not complying with this requirement.

The list of fees should include:

  • A full description of each fee
  • Whether it is payable per tenant or per property
  • When it is payable
  • All fees should be inclusive of VAT and any other taxes
  • The new bill will also require that fees are available on 3rd party websites used to advertise and market the property

Further scrutiny of landlords and letting agents is also likely following the tragedy at Grenfell Tower this year.

It is the responsibility of any person renting out property, the landlord, and also the letting agent, to ensure it is safe, this includes the safety of any items within the property such as furniture and electrical items.

Purchasing products for rental accommodation from reputable suppliers and confirming that they are compliant with relevant regulations is only part of the solution, particularly for electrical items which must be checked to ensure they are safe at regular intervals, and this should be documented and retained.