With the new Tenant Fee Ban coming into place from June 1st, how exactly will this benefit you, as a tenant? The aim of The Tenant Fees Act is that tenants shouldn’t be hit with unexpected costs, so you will likely feel some of the initial financial rewards.
Do the changes apply to my tenancy agreement?
The act applies to Assured Shorthold Tenancies. New and renewed tenancies with a contract signed on or after the 1st June will benefit from the act. If you are renewing at this time, your agent will need to repay your check-out fee. However, fixed tenancies, otherwise known as “periodic” tenancies, will not benefit from the change in fees until 31st May 2020, in the same way as pre-existing tenancies.
So, what fees will I have to pay?
From the beginning of June this year, you should no longer expect to pay your Letting agent a number of other fees, which include, but are not limited to: administration, application, set up, reference fees, contract negotiation, check in and check out, renewal or the end of tenancy.
The only fees you should still be charged are permitted payment fees.
Permitted Payment Fees
These include the following: rent, utilities, council tax, fees for changing a tenant or ending a tenancy early, default fees (such as a late rent payment), security and holding deposits.
Unpaid rent is with interest at 0.75% above the bank of England base rate, from the date the rent is due until it is paid, not levied until the rent is over 14 days in arrears.
A holding deposit is one week’s rent, a deposit made to reserve a property. The reservation can be withheld if anyone withdraws, fails the Right to Rent check, provides misleading information or does not sign the tenancy agreement and/or the Deed of Guarantee, within 15 calendar days.
Simple charges will sometimes be charged for items such lost keys and other security devices. Further costs could be incurred to the tenant if the incident caused the locks to need changing, the service of a locksmith to be required, a new lock, replacement keys for the tenant and/or landlord or other persons.
Variation of contract at your request as the tenant will raise a charge of £50 (including VAT) for each agreed variation. This is to cover costs associated with taking landlords instructions and the preparation and execution of legal documents.
If your tenancy is part of a sharer, where one tenant can take the place of another, you should still be charged approximately £50 per agreed variation. If the agent charges more because of added costs, they will have to provide proof of these costs, as the fee is required to be reasonable. The fee covers costs associated with taking landlords instructions, new tenant referencing, Right-to-Rent checks, deposit registration as well as preparation and execution of new legal documents.
Your security deposit
Security deposits, which cover damages or defaults made by the tenant during the tenancy, will be capped for new tenancies signed on or after the 1st June. The maximum amount will be five weeks of rent, unless your rent is over £50,000 a year, where it will be capped at six weeks.
When you sign a new contract for an existing tenancy, you will be entitled to any excess to be refunded from your original security deposit, to be provided by your Letting agent within seven days.
Leaving your tenancy early
If you wish to end your tenancy early, you will be charged rent due under the tenancy, until the start of the replacement tenancy and will be liable for landlord’s costs in re-letting the property. Rest assured you will not have to pay any more rent than that outstanding due until the end of the tenancy.
So all in all, as a tenant you should definitely feel the financial benefits of this change to tenant fees, for full advice we would recommend contacting your Letting agent. Do feel free to get in touch with our knowledgeable team, (01252) 514000 or firstname.lastname@example.org .