Brokenshire ‘heralds’ new Tenant Fees Act

The ban on fees is expected to save tenants across England at least £240m a year.

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Tenants are to be ‘protected’ from unfair letting fees, seeing their tenancy deposits capped at five weeks’ rent in a new law ushered in today (12th February).

The Tenant Fees Bill, which has received Royal Assent today and now becomes an Act, is said to ‘put an end’ to costly fees imposed by landlords or agents – with the ban on fees to come into effect from 1st June.

Under previous acts, ‘unexpected’ letting fees and high deposits can make properties harder for people to afford and are often not clearly explained upfront – leaving many prospective tenants unaware of the true costs of renting a property.

The new act is expected to save tenants across England at least £240m a year, or up to £70 per household.

The Act also caps the security deposits that renters pay at the start of their tenancy at five weeks’ rent, said to give people the ‘assurance’ that legally they cannot be expected to pay more than this to secure a property.

Landlords and agents will only be able to recover reasonably incurred costs from tenants and must provide evidence of these costs before they can impose any charges, aiming to put a stop to tenants being overcharged for items that only cost a few pounds to replace.

The Act also ensures that tenants who have been charged ‘unfair’ fees get their money back quickly by reducing the timeframe during which landlords and agents must pay back any fees that they have unlawfully charged.

The announcement comes as part of a wider package of government reforms aimed at ‘rebalancing’ the relationship between tenants and landlords to deliver a fairer, better quality and more affordable private rental market.

Ministers have also extended mandatory licensing for Houses in Multiple Occupation (HMOs) to improve living conditions of tenants in shared homes and reinforce rules on smoke and carbon monoxide detectors.

Private tenants can also apply for a refund of up to twelve months’ rent if their landlord does not deal with health and safety hazards in their home.

Other government steps to reform and improve renting include:

• A national database of rogue landlords and agents to keep track of those that have been banned from letting;
• A review of the rating system used by local authorities to assess the presence of serious risks to the health and safety of tenants;
• Mandatory client money protection – by which rental money held by letting agents is safeguarded against theft and fraud – for all agents;
• A mandatory redress scheme for landlords;
• An independent regulator to oversee letting agents, setting standards and maintaining minimum qualifications;
• New, mandatory five-yearly electrical installation safety inspections;
• Considering the case for a specialist housing court to provide greater access to justice for landlords and tenants in property disputes

Commenting on the implementation of the act, Communities Secretary Rt Hon James Brokenshire MP said, “Tenants across the country should not be stung by unexpected costs from agents or landlords.

“This Act not only delivers on our promise to ban letting fees but also caps deposits at five weeks’ rent and sets out how and when landlords can charge tenants fees – helping renters keep more of their hard-earned cash.

“This is part of our ongoing action to make renting fairer and more transparent and make a housing market that works for everyone.”

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