The Tenant Fees Act received Royal Assent last month. The Act bans most letting fees passed onto tenants in the private rental sector in England. The Government estimate that it will save tenants across England at least £240million a year or up to £70 per household.
Landlords (and their agents and third parties acting on their behalf) can now only charge for rent and deposits with limited exceptions.
From 1 June 2019, all new and renewed tenancies will fall under the new regime subject to a transitional period in some cases. The Government is expected to publish guidance to give agents and landlords more direction.
Breaches can be severe with fines of up to £5,000 being imposed for first offences. Subsequent offences will result in a criminal offence being committed or a fine imposed of up to £30,000.
This is clearly another addition to the Government’s raft of more tenant friendly legislation aimed to adjust the balance of power between landlord and tenant given the particularly buoyant private rental market.
As a result, landlords need to ensure that they keep their statutory obligations under review. By way of example, if a landlord does not comply with the Act and receives a prohibited payment (or allows an agent acting on his behalf to take a prohibited payment from the tenant), they can be precluded from serving a section 21 notice on the tenant to regain possession of their property until returning the payment.