On 1 June 2019 The Tenant Fees Act comes into force in England, setting out the Government’s approach to banning payments to landlords in connection with a tenancy of housing.
The ban on tenant fees applies to the private rented sector, specifically Assured Shorthold Tenancies, licences to occupy and student lettings. The Act will relate to all new tenancies and renewals granted from 1 June onwards. Pre-existing tenancies will be required to adhere to the Act from June 2020.
All fees in connection with a tenancy of housing in England are prohibited unless they are ‘permitted’ under the Tenant Fees Act. Landlords or letting agents are also banned from asking tenants to make a payment to third parties.
Permitted payments include rent, tenancy deposits, holding deposits, council tax and utilities, it should be noted though that each of these has its own restrictions defined in the Act.
The aim of the Act is to reduce the initial and ongoing costs to tenants and is part of a wider package of measures designed to create affordable properties in the private rented sector. It is estimated that the Act will save tenants £240million a year in lettings fees.
Landlords and agents should review their tenancy agreements to ensure they are compliant and that they do not include any prohibited payments.