Yesterday, the government published its Draft Tenant Fees Bill, which will ban all letting and agents fees charged to tenants in England.
In the 2016 Autumn Statement the government first announced they would ban letting agent fees. The Government then held a consultation period from April-June 2017.
The main features of the draft bill are:
- Ban letting agents or landlords from charging fees for the granting, renewal or continuation of a tenancy.
- Cap security deposits at no more than 6 weeks’ rent. The draft bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- In order to remove a property from the market, landlords and agents are permitted to charge a refundable holding deposit of no more than one week’s rent. The holding deposit must be returned within 15 days if the landlord or agent decides not to take forward the tenancy.
- Landlord or letting agents do not have to refund a holding deposit if:
- A tenant does not have the right to rent property under the Immigration Act
- or if the tenant provides false or misleading information (ie failed referencing checks)
- or if the tenant decides not to enter into the agreement (changes their mind) or fails to take all reasonable steps to enter into a tenancy agreement (deliberately drags their feet).
The holding deposit for the successful tenant can then form part of either the first month’s rent or the tenancy deposit.
- Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees and creating a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Civil penalties of up to £30,000 can be issued as an alternative to prosecution.
- Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
Agents and landlords will only be permitted to charge tenants fees in regards to:
- A change or early termination of a tenancy when requested by the tenant
- Utilities, communication services and Council Tax
- Payments arising from a default by the tenant such as replacing lost keys
To read the full draft bill take a look here: https://publications.parliament.uk/pa/bills/cbill/2017-2019/0203/18203.pdf
The draft bill is subject to Parliamentary timetables and will be introduced in law next year. If you would like to get involved in the dialogue about the bill via your your constituency MP, you can do so via the ARLA Propertymark toolkit here: http://www.arla.co.uk/letting-fees/