British Property Award Winner 2017 & 2018
Following in the footsteps of the Second Payment Services
Directive (ban on unfair card surcharges) back in 2018, the government has now moved
to introduce legislation prohibiting unfair charges on tenants under the Tenant
Fees Bill 2017-2019.
Madison Brook International takes a moment to answer questions
on what this might mean in practice:
Q. So, what is the
Tenant Fees Bill?
A. Since 2017, the government has been working on
proposed legislation to introduce a ban on unfair tenancy fees in England –
following a similar introduction in Scotland in 2016.
Q. Why has the legislation
A. In a bid to combat unfair costs and charges, it was agreed
that consumers should be protected from costs relating to the initial granting
of a tenancy. The legislation was then later amended to include protections on tenancy
deposits sums, holding deposits and tenancy surcharges (for late rents),
inventory & check-out costs, renewal costs etc.
Q. When does the
legislation come into force?
A. On the 15th January 2019 the Bill passed
its third reading in the House of Lords and is likely to receive Royal Ascent within
weeks. It is anticipated that the legislation will become law on the 01st
Q. Will I be able
to reclaim tenancy costs paid before the 01st June 2019?
A. The legislation will only relate to tenancies signed
after the implementation date.
Q. If a tenant has
contracted to pay tenancy/check-out costs prior to this date, can they still be
levied at the tenancy end?
A. It is unclear whether the government intends to
restrict costs agreed in active tenancies at this stage – although we suspect
the legislation will restrict all payments following its implementation date,
so it is best to make preparations now.
Q. Does this mean
that due diligence on my tenant may be reduced?
A. It is highly likely that some agents will be unable to
sustain referencing and administration at the same level that is currently
Q. Are there steps
that I should take as a landlord to protect myself?
A. Yes, absolutely. We would recommend that you clarify
the details of all referencing (and potential costs) at the point of
instruction - if they haven’t done so already. You may also want to ask the
agent to put this in writing. We would recommend that you use the services of an
agent registered with a professional body – like PropertyMark and the TPOS –
this will give you recourse if something goes wrong.
Q. Is it all doom
A. Certainly not. Whilst the introduction of the
legislation is a large sector change - a good, professional, thorough and
regulated agent will ensure that you are adequately protected.
Should you have any concerns about your tenancy or if you
need further information on these (or any other proposed legislative change),
please feel free to contact us for free, impartial advice.
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