You should read this blog if you are a landlord of residential properties let on assured shorthold tenancies, as it provides a short summary of the impact of the new Tenant Fees Act 2019.

As of 12 February 2019 landlords and letting agents can no longer:

  1. Seek excessive deposits (these are now limited to a maximum of equivalent to 5 weeks rent for annual rents under £50,000 and 6 weeks rent for rents over £50,000;
  2. Seek excessive or multiple holding deposits (which must be equivalent to no more than one weeks rent);
  3. Attempt to charge letting fees disguised as a topped up initial rent payments;
  4. Unjustified or unreasonable “default” fees for example where a tenant needs replacement keys, replacement smoke detectors or has made a late payment;
  5. Charge more than £50 (or justified reasonable costs) for dealing with a tenant request to vary, assign or novate the tenancy agreement;
  6. Charge a tenant a “fine” for early termination of its lease, if the landlord cannot demonstrate loss; or
  7. Charge a premium for supplying communications service connections (e.g. internet, phone);

If a landlord or its agent is found to have charged so called “prohibited payments”, then repercussions include:

(a) the tenancy not being binding on the tenant;

(b) financial penalties can be imposed (with some breaches attracting penalties of up to £30,000);

(c) banning orders; and

(d) unless and until a prohibited payment is returned to a tenant, the landlord will not be able to terminate an AST.

The legislation does not have retrospective effect and will be effective from 1 June 2019.