Draft Tenant Fees Bill (What Every Landlord Needs To Know)

I just wanted to give you a quick update regarding to the Tenant Fee Ban. The draft bill was released 01/11/2017. We now have a clear indication as to what this will mean for both landlords and letting agents. The Tenant Fee Ban was introduced in Scotland a couple years ago, and it’s quite clear from what I’ve read within the bill some lessons have been learned. What I’m going to do is just give you a brief rundown as to what the implications are for  both letting agents and landlords. As you can imagine, it’s relatively weighty, so here are few key points that you need to be aware of.

Let’s start with number one, which is good news, you can still charge rent and you can still take a deposit. There was talk that the deposit was going to be reduced to four weeks, however, they have left it at six weeks. You will not be able to charge any fees in relation to granting, renewing, or the continuance of a tenancy. Services from third parties … What I mean by that is you won’t be able to charge, for example, for your referencing costs or for any inventories. All of these will be classed as prohibited payments. You will be allowed to charge a holding deposit that will be up to one week’s rent, but this must be returned, or you must deduct it from the first rent payment. Don’t be thinking you can just charge a higher rental value for the first month as this will be classed as a prohibited payment!

There will be fines, and they’re quite significant. I think this is something that’s going to come within the remit of Trading Standards, and I’m sure Trading Standards will be helping tenants too. Fines for landlords/letting agents not complying are up to £5,000, but for somebody who is a persistent offender, that could increase to £30,000. So as I’ve said, pretty significant fines.

There are permitted payments, so it’s not absolutely everything that has been banned. So, you won’t have to, for example, refund the holding deposit if the tenant fails right to rent under Immigration Act 2014, if the tenant fails to provide you with the correct information and that affects their suitability as a tenant. Also, if the tenant again fails to enter into the tenancy agreement. In relation to default payments you can still charge tenants late payment fees. You can still apply a charge if the tenant lost their keys.

I think what we’re looking at October 2018, but it may run into 2019 before this is released. If you are unsure as to how this may affect you, or you have any questions please do not hesitate to contact me. You can also use this link http://bit.ly/dtfb0111,here you find the complete draft bill.

Ian Mclaughlin (Author)