Government Publishes Guidance on the Tenant Fees Act 2019

4th Apr 2019

The Tenant Fees Bill 2017-19 received Royal Assent on 12th February 2019 and became the Tenant Fees Act 2019 (“the Act”). On 1 April 2019, the government published guidance on the impact of this legislation.

Commercial Property and Land Disputes

The Act restricts the ability of landlords and letting agents to charge certain fees to tenants and prospective tenants of assured shorthold tenancies (excluding social housing and long leases) and student accommodation in England. It imposes a ban on charging any fees to tenants unless those fees are contained within the list of “permitted payments” in the Act. The Act will be introduced in two stages. It will apply to all new tenancies from 1st June 2019, and then to all tenancies as from 1st June 2020.

The “permitted payments” under the Act are:

  1. a) The rent
  2. b) a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
  3. c) A refundable holding deposit (to reserve a property) capped at no more than one week’s rent
  4. d) Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
  5. e) Payments associated with early termination of the tenancy, when requested by the tenant
  6. f) Payments in respect of utilities, communication services, TV licence and council tax; and
  7. g) A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement

The tenant will not be bound by any term of the tenancy agreement which requires the tenant to make a prohibited payment. Trading Standards will be responsible for enforcing the ban on such payments.

The landlord will be prevented from serving a notice to terminate the tenancy under s. 21 of the Housing Act 1988 until it has paid back to the tenant any banned payments.

A breach of the Act will usually be a civil offence with a financial penalty of up to £5,000, but if a further breach is committed within 5 years of the imposition of a financial penalty or conviction for a previous breach this will be a criminal offence. The penalty for the criminal offence is an unlimited fine.

Where an offence is committed, local authorities have a discretion to impose a financial penalty of up to £30,000 as an alternative to prosecution.

The full guidance can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791273/TFA_Guidance_for_LandlordsAgents.pdf