From 1 June 2019, landlords and letting agents in England will no longer be able to charge tenants certain fees before and after they rent a property. This will also apply to asking someone to make a payment on the tenant's behalf, such as a guarantor or parent. The ban will initially apply to new and renewed licences and fixed-term assured shorthold tenancies after 1 June. By 1 June 2020, it will apply to all other existing licences/tenancies.
The law will apply to:
Examples of things that landlords and agents won't be able to charge for include:
You won't be able to require your tenant, a person acting on their behalf or someone guaranteeing the payment of their rent, to:
You also can't require the tenant, or anyone else connected to the AST or licence, to do any of the above by:
The following payments will not be banned:
Taking a holding deposit
This will be allowed, but limited to a maximum of 1 week's rent. Once taken, you have 15 days to make a decision about the tenant and for an agreement to be agreed and signed (the deadline).
You must repay the holding deposit:
You won't have to make a repayment in certain circumstances, such as if the tenant:
This will be allowed, but limited to a maximum of 5 weeks' rent where the annual rent is below £50,000, or a maximum of 6 weeks' rent where the annual rent is £50,000 or more.
Rent, of course, will be allowed, but the law prevents certain practices in an effort to prevent landlords from getting around the ban. For example, you won't be able to set a higher level of rent for the first portion of the AST/licence and then drop it down afterwards.
Utility and communication services
You can continue to charge tenants for the billed amounts (but no more than this) of council tax; electricity, gas or other fuel; water and sewerage; landline telephone, internet, TV licence and cable or satellite television.
Breaches of the agreement during the letting
Only 2 types of losses can be recovered: loss of keys and late payment of rent.
Changing, assigning or replacing an agreement at the request of the tenant/licensee
This must be the reasonable costs of the person receiving the payment and no more than £50.
Ending the agreement early at the request of the tenant/licensee
The cost cannot be more than the loss suffered by the landlord as a result of the early end.
Breaches of the agreement after the letting
Where the tenancy/licence has been breached and caused damage, landlords can still seek compensation via deductions from the deposit or court action.
In Scotland there has been a ban on charging fees to tenants since 2012 following changes made to the Rent (Scotland) Act 1984.
The law states that any fee other than rent and a refundable deposit is not allowed. This includes charging fees for references, tenancy paperwork, inventories and the renewal of a tenancy agreement.
If a fee is charged for anything other than rent or a deposit, the tenant can reclaim it from you or the letting agent.
There are no laws banning the charging of fees to tenants, though there have been recent cases of tenants successfully challenging in court certain fees charged by letting agents.
The Welsh Government has introduced a bill banning tenant fees in the private rented sector, however, it is yet to become law.