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 been introduced?
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 June 2019.
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 offered.
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 and gloom?
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.