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More Legislation for the Rental Sector!

More Legislation for the Rental Sector!

25th February 2019

You might think that the only thing discussed in Parliament for the last two years has been Brexit; but our politicians have been debating an important piece of legislation that will impact the rental sector.


Our residential team has been monitoring, with interest, the developments which have led to the new Tenant Fees Act 2019.  This will come into force on 1 June 2019 to restrict what is seen as unfair fees charged to tenants of residential property and so, controversially, lining the pockets of some greedy letting agents! The lettings industry has sought to protect landlords and the legislation had been hotly debated however the key measures of the Act include:

  • Security deposits must not exceed the equivalent of five 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 tenancy will be capped at £50.00.
  • 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.
  • Trading Standards will enforce the ban and will make provisions for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal.
  • Landlords are prevented from recovering possession of their property via the Section 21 until they have repaid any unlawfully charged fees.
  • Enabling the appointment of a lead enforcement authority in the lettings sector.
  • The Consumer Rights Act 2015 is amended to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
  • Local authorities are able to ring-fence any money raised 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.
  • Payment of damages where the tenant has breached terms in their tenancy agreement.
  • 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 3% above the bank of England base rate).

The Government is preparing to publish detailed guidance that will give agents and landlords a better understanding as to how the ban should be practically implemented. The Sibley Pares team will endeavour to keep you informed as this unfolds.

Source material: http://www.arla.co.uk/lobbying/letting-agent-fees/england.aspx