Draft ‘Tenant Fees’ Bill

The Government has published a Draft ‘Tenant Fees’ Bill to ban letting agents and landlords from charging letting fees to tenants.

Draft ‘Tenant Fees’ Bill

This Bill will be referred to as the ‘Tenants Fees’ Bill and has raised unprecedented questions for the future of the industry and brings all agencies, large and small, to a fork in the road.

At EMPM we have already taken steps to ensure we can continue to offer our landlords the same excellent level of service by reviewing our fee structure and implementing a few minor changes to how we charge for our services. Further changes may be necessary once the full impact of this ban is revealed.

The Bill seeks to reduce costs to tenants by banning agents and landlords from requiring any payments from tenants as a condition of granting, renewing or continuing a tenancy with the exception of:

  • The rent
  • A refundable tenancy deposit capped at no more than six week’s rent
  • A refundable holding deposit capped at no more than one week’s rent
  • Tenant default fees (such as replacing a lost key or late rent payment fine)

Letting agents or landlords do not have to refund a holding deposit if:

  • A tenant does not have the right to rent property under the Immigration Act
  • If the tenant provides false or misleading information (failed referencing checks)
  • If a tenant decides not to enter into the agreement (changes their mind, fails to take all reasonable steps to enter into a tenancy agreement by deliberately taking their time).

The holding deposit for the successful tenant can then form part of either the first month’s rent or the tenancy deposit.

The Bill also bans agents and landlords from requiring such tenants to secure and pay for services provided by a third party or make a loan.

There will be fines of up to £5,000 for agents or landlords breaking the law and if there are two or more contraventions of the law within five years, fines can extend up to £30,000 or criminal prosecution.

Trading Standards will enforce the ban and make provision for tenants to be able to recover unlawfully charged fees.

Full details of the Bill can be found here Draft Tenants Fee Bill


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