For all assured shorthold tenancies, tenancies of student accommodation and most licences to occupy, which are entered into on or after 1st June 2019, The Tenant Fees Act 2019 will limit what a landlord can charge tenants. As a result of the Act, tenants will now face reduced costs when starting a new tenancy on or after the 1st June 2019.
Landlords will only be permitted to charge seven different types of payment in connection with any of the tenancies mentioned above which are entered into from the 1st June 2019. Any other payment charged by the landlord will be classified as a prohibited payment.
If any prohibited payments are demanded by the landlord then the section 21 procedure of evicting a tenant will not be able to be used unless the landlord returns the unlawfully charged fee back to the tenant. If the landlord does not return the prohibited payment back to the tenant within 28 days then they will have committed a civil offence and potentially a criminal offence if the prohibited payment is repeated.
Under The Tenant Fees Act 2019, for any tenancy entered into from the 1st June 2019, only the following seven payments can be charged otherwise they will be a prohibited payment. The seven payments are as follows:
- The rent, which must be paid at regular intervals specified in the tenancy agreement
- A refundable tenancy deposit, capped at no more than five weeks’ rent where the annual rent is less than £50,000.00. The deposit is capped at six weeks’ rent where the total annual rent is £50,000.00 or above
- A refundable holding deposit, (to reserve a property) capped at no more than one week’s rent
- A payment to change the tenancy when requested by the tenant, capped at £50.00, or reasonable costs incurred if higher
- A payment associated with early termination of the tenancy, when requested by the tenant
- A payment in respect of utilities, communication services, TV licence and council tax
- A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement
There are some significant financial penalties for a breach of the Act. Depending on the type of breach of the Act, fines range from £5,000.00, to being potentially unlimited.
Any prohibited payment made by the tenant must be returned to the tenant within a 28 day period. If the landlord does not do so then there will be a penalty of up to £5,000.00.
If the landlord commits another breach of the Act within 5 years of the first, then this is treated as a criminal offence, with an unlimited fine.
Landlords will not have to return any tenancy deposit that is over the cap for tenancies which have been entered into before the Act came into force.
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