Tenant Fees: Understanding Your Rights and Responsibilities

The Tenant Fees Act, which came into force on June 1, 2019, represents a significant shift in the landscape of rental agreements in England. This new regulation is designed to enhance transparency and fairness in the rental market, primarily by eliminating hidden costs and exorbitant fees that can burden tenants. Here, we provide a comprehensive guide to what you can and cannot be charged for as a tenant under this law, aiming to empower you with knowledge and confidence in your tenancy agreements.

What Are Prohibited Payments?

Under the Tenant Fees Act, most upfront fees associated with renting a property are banned. Landlords and letting agents can no longer charge tenants for a range of administrative activities that were previously commonplace. These include:

• Viewing Fees: You cannot be charged just to view a property.
• Set-up Fees: Charges for setting up your tenancy, like administration fees or fees for referencing, are now prohibited.
• Check-out Fees: Landlords and agents cannot demand payment for conducting a final inspection when you move out.

What Can You Still Be Asked to Pay?

Despite the wide-ranging ban, there are still some payments that landlords and agents can require. These are strictly regulated and include:

• Rent: Clearly, the most fundamental aspect of a tenancy agreement.
• A Refundable Deposit: Capped at no more than five weeks' rent (if your annual rent is less than £50,000) or six weeks' rent (if your annual rent exceeds this amount).
• A Holding Deposit: To reserve a property, capped at one weeks' rent.
• Changes to the Tenancy: If you request changes to the tenancy agreement, a fee of up to £50 may be charged.
• Early Termination Fees: If you decide to leave before the end of your agreement, you can be charged, but this is also regulated.
• Utilities and Council Tax: Payments for services like water, broadband, and council tax are still your responsibility as outlined in your tenancy agreement.
• Default Fees: Charges for late rent payments or replacing lost keys can only be billed if they are reasonable and evidenced in writing.

Default Fees: Specifics on Late Rent Payments

• Interest on Late Rent: If your rent payment is more than 14 days overdue, your landlord is allowed to charge interest. However, this interest is capped at 3% above the Bank of England's base rate per annum, calculated from the date the payment was due until it is paid.

How to Handle Unlawful Fees?

If you find yourself being asked to pay a fee that you believe is not permitted under the new law, there are several steps you can take:

1. Clarify the Charge: Refer to the guidance provided in the Tenant Fees Act to confirm whether the fee is indeed prohibited.
2. Communicate with Your Landlord or Agent: Address the issue directly and request that the fee be returned.
3. Seek Redress: If the landlord or agent refuses to comply, you may seek advice from organizations like Citizens Advice or consider formal complaints to a redress scheme.
4. Legal Action: In some cases, you might need to pursue formal legal action to reclaim unlawful fees, with support available through local authorities or the First-tier Tribunal.

Why This Matters to You

Understanding your rights under the Tenant Fees Act is crucial not only for protecting yourself from unexpected costs but also for ensuring a fair and transparent relationship with your landlord or letting agent. With this knowledge, you can confidently navigate the rental market, aware of what costs you should and should not be paying, ultimately leading to better rental experiences and financial planning.