Some good news for tenants. The new Tenant Fees Act is now in force in England. It caps the amount renters can be charged for their deposits and bans letting fees altogether. As part of the Government’s bid to reduce hidden costs for tenants.
The Government expects to save tenants across England at least £240m a year through the changes.
Here’s what the new Act means for renters, landlords and agents.
The new Tenant Fees Act reduces the charges that tenants face right from the start of the renting process. It caps the amount renters can be charged for their deposits and bans lettering fees altogether. Deposits to be capped at the amount of 5 weeks rent.
It offers protection throughout the tenancy. Also, when the contract comes to an end by getting rid of any hidden costs.
When does the Tenant Fees Act come into effect?
The new law was passed in February this year. The ban on tenant fees came into force on 1 June 2019.
Letting agents and landlords will no longer be able to charge rip-off fees to tenants in England.
Hailed as a major victory for the country’s 4.7million rented households, the ‘Tenant Fees Act’ outlaws additional charges when a tenant signs up for a new property or renews a contract.
These charges can range from arranging a viewing on a property. To carrying out a reference check or renewing a contract, and typically add an extra £300 onto the cost of moving.
How will the Tenant Fees Act affect landlords and agents?
The legislation places new rules on landlords and agents about what they are allowed to charge tenants.
They will only be able to recover ‘reasonably incurred costs’ and will have to provide evidence of what these costs are before charging their tenants.
The changes help put an end to the practice by some landlords of overcharging renters for minor damages. Or presenting them with an exaggerated bill to replace an item, such as a £60 charge for a new smoke alarm.
Any landlords or agents who ignore the ban on letting fees will now face a fine of £5,000. Which could increase to £30,000 for repeat offenders or result in a criminal offence.
How will the new bill affect tenants and renters?
The changes should protect private tenants from unexpected and unfair letting fees that can make properties hard to afford.
Renters no longer need to save more than five weeks’ rent to secure a property and no longer have to pay letting fees.
Holding deposits to be capped at one weeks’ rent and tenants will only be charged £50 for a change to a tenancy. Unless a landlord proves the process has cost more than this amount.
The amount of time it takes for landlords and agents to pay back any fees they have charged unlawfully is also reduced. To ensure renters get their money back quickly.
And landlords will not be able to remove tenants from a property using the Section 21 eviction procedure until they have paid back any fees or a holding deposit that renters were charged for unlawfully.
The new act should to save private renters up to £70 per household.
Will the Tenant Fees Act be rolled out everywhere in the UK?
Wales passed a similar law recently. It will come into force in the autumn. Scotland’s ban on letting fees has been in force since 2012.
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