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:
- 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;
- Seek excessive or multiple holding deposits (which must be equivalent to no more than one weeks rent);
- Attempt to charge letting fees disguised as a topped up initial rent payments;
- Unjustified or unreasonable “default” fees for example where a tenant needs replacement keys, replacement smoke detectors or has made a late payment;
- Charge more than £50 (or justified reasonable costs) for dealing with a tenant request to vary, assign or novate the tenancy agreement;
- Charge a tenant a “fine” for early termination of its lease, if the landlord cannot demonstrate loss; or
- 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.