Your Tenant Fee Ban questions answered

Your Tenant Fee Ban questions answered

The tenant fee ban has certainly gained more momentum since the start of the year, especially since we now have an implementation date of June 1st

We’ve also seen the release of Zoopla’s ‘State of the Property Nation 2018’ survey, which revealed that the tenant fee ban is one of the most asked questions from landlords. It’s been found that “awareness of legislation changes amongst landlords is quite low. Agents are much more on top of the situation. Only around a third of landlords are aware of some of the biggest regulatory changes.

With this is mind, we want to help landlords get clued-up on everything you need to know about the Tenant fee Ban and answer the most common questions.

Exactly what fees/charges are banned?

A lot of the confusion over the new legislation has come down to the name – the Bill is not necessarily a ‘tenant’ fee ban, it is simply a general fee ban. Although the final form for the Bill is yet to be confirmed, we have a good indication of where the legislation is heading and what fees will be banned:

  • Charges for a guarantor form
  • Credit checking
  • Taking up references
  • Inventory checks
  • Domestic cleaning
  • Professional cleaning
  • Having the property de-flead as a condition of allowing pets in the property
  • Administration costs
  • Requirements to have specific insurance providers
  • Gardening provisions

In addition to this, there will be a cap on deposits at the equivalent of five weeks’ rent where the annual rent is less than £50,000. Only if the annual rent exceeds this sum is the cap extended to six weeks.

What penalties could you face?

If you are found to be charging any of the above fees from June 1st, there is a £5,000 fine per fee. And if you’re found charging fees again after this, there is a £30,000 fine per fee.

What will happen to letting agencies and the knock-on affect for landlords?

While we can’t predict the future, there’s a high chance that ill-prepared letting agencies will be strongly hit by the new legislation with approximately 20-30 per cent reduced revenue. One report has estimated that the average letting agent stands to lose £60,000 in the initial 2 years of its implementation, which could result in agency closures.

Despite the wholly negative impacts for letting agents, I still strongly believe that fundamentally the outcome will be positive for landlords. The agencies that make it through the adjustment period will be offering a better service for you, your property and your tenants.

Will it affect rents?

Unless someone has a crystal ball, there is no definite answer to this. Only time will tell on this one.

Ultimately, the decision comes down to you as a landlord if you wish to increase your rent or not. Be wary if you do though, as there can be many repercussions due to the fragile and competitive state of the industry. And while some tenants may be prepared to pay a little extra each month for a property they don’t wish to leave, there will be other tenants that will be tempted to look for a cheaper option knowing they won’t have to incur fees if they move.

Does it apply to existing tenancy agreements?

The law is not retrospective, meaning that it only affects new contracts signed on or after June 1st. Fees can still be charged to tenancies signed before then for a 12 month period until the legislation is enforced upon all contracts from 1st June 2020.

It is worth noting that new legislation applies when a tenancy is renewed after 1st June 2019 also. If you have taken a six-week deposit from that tenant then you will have to give back that additional week under the new regulation.

What about move-in fees and right to rent checks?

If you hadn’t already guessed, Right to Rent checks and move-in fees will not be chargeable under the new legislation.

While there are technically no rules against landlords or letting agencies requesting tenants pay for their own referencing directly, we would not recommend doing this as it’s going deep into a grey area.

Can you still take an increased deposit if the tenant has a pet?

Again, no. Although you can charge a higher rent to tenants with pets, so long as the premium is disclosed under the Consumer Protection Regulation Act of 2008 and state it in the property’s advertisement.

Any more questions?

We understand that the Tenant Fee Ban is a significant modification in legislation that is likely to change the industry for good. That’s why we’ve comprised an e-book with all the information you need. Enter your details below to download it for free today:


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