On 1st June 2019, most tenant fees are banned in new tenancies (including renewals). The act will ban any prohibited fees in all existing tenancies on 1st June 2020.
Does it apply to me?
The ban applies to fees charged by landlords, letting agents and student accommodation providers. It applies if you have an assured shorthold tenancy, lodgers agreement or a license agreement. It does not apply to company lets or non-assured tenancies. Find out what type of agreement you have here.
Most fees UK tenants are used to paying - such as inventory fees, referencing fees, contract and admin fee - are all banned for new tenancies from 1st June 2019.
You may still have to pay a holding deposit, damage deposit and up front rent when starting a new tenancy. From 1st June 2019, holding deposits are limited to 1 week's rent, and most damage deposits limited to 5 weeks' rent. If the total value of your tenancy exceeds £50,000 for the year, the landlord may charge you a 6 week damage deposit.
You can still be charged up front fees in new tenancies for the following:
- If you lose your key and need a new one cut. This can only be the landlord or agent's reasonable costs. Any costs they cannot provide evidence for cannot be charged to you.
- If you are more than 14 days late on your rent, you can be charged interest limited to 3% above the Bank of England base rate.
- If you want to swap tenants (assign). The government guidance suggests this should cost £50, but may be more if the landlord can evidence their costs.
- If you want to end your tenancy early, before the fixed term ends or before you can use your break clause if you have one. Your landlord can only charge you their reasonable costs and losses- for example costs of readvertising, and the rent until they find a new tenant.
Landlords can also charge you costs if you breach the tenancy, but these are to be charged from the deposit when the tenancy ends, which allows you to dispute the charges with your deposit scheme. Or, your landlord will have to take you to court if they want the money before the end of the tenancy.
Existing tenancy contracts
The ban has applied to all existing tenancy agreements since 1st June 2020.
If your current contract, signed before 1st June 2019, states you must pay a renewal fee to renew your tenancy, this can still be lawfully charged if you renewed before 1st June 2020. However, the landlord won't be able to include further fees in your renewal agreement.
If you renew your tenancy, any deposit money you have paid that exceeds 5 weeks' rent must be refunded. For example, if you paid £600 deposit and your rent is £100 a week, your landlord or agent must refund £100.
If you left your tenancy before 1st June 2020, you would still have to pay a check out fee or inventory fee if it is in your contract.
Landlords cannot charge more rent for the first few months to cover the fees they are no longer allowed to charge. But there is no restriction on what landlords can charge for rent for the whole tenancy, so this may increase. We are not expecting huge rent increases however, but it is difficult to say at this time what will happen.
Can I get a refund for fees paid before 1st June 2019?
No. You cannot be refunded for any fees paid before 1st June 2019, even if you haven't signed yet, and even if your tenancy starts after 1st June. If you've signed an agreement before 1st June, even if the tenancy starts later, none of the bans apply until you renew, or until 1st June 2020.