What is the Tenant Fees Act?
The Tenant Fees Act came into force on 1 June 2019, banning all tenant fees which are not considered to be ‘permitted’ fees. Permitted fees include rent, security deposits, holding deposits, early termination and some default fees. The key measures include:
- Tenancy Deposits must not exceed the equivalent of five weeks’ rent (unless the annual rent exceeds £50,000 in which case deposits are capped at six weeks’ rent)
- Holding Deposits will be capped at no more than one week’s rent
- The amount that can be charged for a change to a tenancy will be capped at £50, unless the landlord demonstrates that greater costs were incurred
- Consumer Rights Act 2015 specifies that letting agent transparency requirements should apply to third-party websites
- A breach of the ban will incur a civil offence with a financial penalty of up to £5,000
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 where they have had to replace keys or a respective security device, or a charge for late rent payment (not exceeding three per cent above the bank of England base rate)
What is the Renting Homes (Fees etc.)(Wales) Act?
The Renting Homes (Fees etc.)(Wales) Act legislation came into force on 1 September 2019. Letting agents and landlords working in Wales can now only charge tenants for fees in relation to rent, security deposits, holding deposits and breaches of contract. The key measures include:
- Tenants can not be charged for an accompanied viewing, inventory, signing a contract, exit fees or for renewing a tenancy
- Letting agents and landlords must only charge fees relating to rent, security deposits, holding deposits, utilities, TV licence, communication services, Council Tax and payments in default
- Provides a regulation-making power to limit the level of security deposits
- Caps holding deposits to the equivalent of one week’s rent
- Creates a clear, simple and robust enforcement regime for offences
Renting Homes Act enforcement
Enforcement allows for Fixed Penalty Notices of £1000 to be issued against anyone charging a banned payment. If penalties are not paid, enforcement authorities, which encompasses local authorities and Rent Smart Wales, can prosecute through the Magistrates Court. Convictions could result in an unlimited fine and will be taken into account by Rent Smart Wales when considering whether to grant or renew a licence.