One of the most significant changes is about to shake up the entire residential lettings market from as early as April next year when the government will introduce the Tenant Fee Bill to control the amount of fees a landlord or his agent can charge a tenant during their tenancy. Nationally, it is suggested that a tenant is being charged over £200 per tenancy application and often up to £100 to renew their tenancy contracts every six months. Although, these fees have been commonly referred to as a ‘licence to print money,’ as letting and managing agents ourselves, chargeable fees contribute too many facets to ensure the tenant is protected and receives an excellent service throughout their tenancy. From obtaining references for each adult tenant to outsourcing inventory reports and records of conditions; from ensuring their tenancy deposits are protected to providing a rapid response when maintenance repairs are reported – our residential letting business is built around the tenant’s experience.
Although the final draft is still to be agreed through Parliament, is it looking likely that the following will be implemented next year:-
• capping holding deposits at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
• capping the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred
• creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
• requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
• prevents landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
• enabling the appointment of a lead enforcement authority in the lettings sector
• amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
• local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement
Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:
• a change or early termination of a tenancy when requested by the tenant
• utilities, communication services and Council Tax
• payments arising from a default by the tenant such as replacing lost key
We at Lister Haigh are continuing to monitor the details of this pending bill and will be advising our Landlord clients accordingly. We are committed to ensure our professional service standards are not affected by these changes and any alternations in our general practice will be clear and transparent.
Should you wish to contact one of our specialists on this matter or any aspect of the Residential Lettings sector, please do not hesitate to call 01423 322382 and ask to speak with either Paul or Scott.