The Consumer Rights Act 2015 (CRA) first set out the need to publish and display all fees clearly to consumers so there are no hidden surprises.
The Tenant Fees Act 2019 extended this by saying all fees must be transparent and obvious to all prospective tenants. This includes where agents advertise property details on third-party sites e.g. property portals or other similar websites. The Act says that adverts can include links these websites but the sites must display full details of fees.
While all fees to tenants are now banned, unless specifically allowed by the Act, there should still be a separate fee schedules for tenants which may lawfully apply, as well as the on-going schedule(s) for tenancies not covered by the Act, as well as landlord fees. For clarity, the Act only allows fees to be charged for:
| Refundable holding deposit |
Up to one week’s rent per property |
| Tenancy deposit |
Where the annual rent is less than £50,000, the maximum deposit is up to 5 week’s rent
Where the annual rent is between £50,000 and £100,000, the maximum deposit is up to 5 week’s rent
|
| Changes to a tenancy |
i.e. of sharer, pet, permission to sub-let, permission to run a business from the property; any other amend that changes the contractual responsibilities (capped at up to £50 per change UNLESS the landlord or agent can prove the cost washigher and reasonable) |
| Early termination/surrender fee |
The reasonable loss suffered by the landlord e.g. referencing, advertising, rent until the next tenant moves in (or untilthe fixed end date) |
| Default fees |
These fees should be written into the tenancy agreement
Charges for late payment of rent only apply after 14 days (interest @ max 3% above base rate)
Charges for replacing locks/security fobs are limited to:
• standard door key £3 - £10
• specialist door key £5 - £20
• replacement key fob could be up to £50, with evidence) |
| Rent |
|
| Council tax |
|
| Utilities (gas, electric, water) |
|
| TV licence |
|
Communication services
(broadband, cable, satellite) |
|
Publishing your schedule of fees - what does this mean?
When publishing your fees to tenants, you will need to provide separate lists for:
- Existing tenancies
- All fees, that are allowed, must be justified and reasonable. For more detail see the Government guide on prohibited payments here.
- Most existing tenancy agreements will have been signed on or after 01 June 2019 and should be in a new tenancy template that has no fees payable other than those permitted by the Tenant Fees Act.
- For any tenancy agreements signed before 01 June 2019, clauses containing fees will be unenforceable when the tenancy ends or is renewed unless they are permitted by the Tenant Fees Ac.
- Assured tenancies, company lets
- The Tenancy Fees Act does not apply to non-Housing Act tenancies or common law tenancies, however all letting agents must still display any fees under the CRA (you can find the legislation here).
- Landlords
- Letting agents also have a duty to be open and transparent about the relevant fees their landlord clients will, or may, need to pay. This requirement can also be found in the CRA chapter 3 here, paragraphs 85 and 86
Penalties:
- A letting agent who displays fees incorrectly, or does not display them at all, could be fined up to £5,000
- If an agent is also found to have charged a fee which is banned, the penalty is £5,000 for each fee charged
- National Trading Standards also works with property portals and industry groups to make it as easy as possible for estate and letting agents to provide basic essential material information and make sure it is reasonable promoting confidence for tenants to make well informed decisions about property transactions
