A draft Tenants Fees Bill has now been published. As expected, the Bill bans landlords and letting agents from requiring tenants to make any payments as a condition of their tenancy, with certain exceptions.
The Bill applies to assured shorthold tenancies and licences but not to other types of letting such as company lets.
Permitted Payments
The payments that can still be required from tenants are:
- · Rent
- · A refundable security deposit not exceeding six weeks’ rent (the original proposal was one month’s rent)
- · A refundable holding deposit not exceeding one week’s rent
- · Fees for management services carried out as a result of a tenant’s default (such as repairs arising from deliberate damage to the property or a breach of the tenant’s obligations)
Penalties
Enforcement of the ban will be carried out by local authority trading standards officers. They can impose penalties of up to £5,000. A repeated breach is a criminal offence but a civil penalty of up to £30,000 can be imposed as an alternative to prosecution.
There is also a mechanism for Tenants to recover unlawfully charged fees.
Implementation
The Bill is still in draft and has yet to be laid before parliament. The new rules are not likely to come into force before late 2018. However, lettings agents need to start thinking about how they will adapt their practices to comply with the new rules.