Tenant Fees Act – four years on

On this day in 2019, letting agents in England were banned from charging tenants fees for starting, renewing or ending a tenancy. The Tenant Fees Act followed years of campaigning by Generation Rent and others.

These fees used to cost tenants an average of £400 on top of rent and deposits – and could reach as much as £800 charged by some agents.

Now, letting agents can only charge you rent, refundable holding and security deposits, or specific fees relating to tenant actions like ending the tenancy early.

It’s hard to know exactly how well the law is working, but we don’t get many reports of dodgy behaviour. The most common issue is landlords and letting agents refusing to refund holding deposits when the tenancy application falls through – in most cases you are entitled to a refund and can apply to the first-tier tribunal to get your money back.

We’ve looked back at the last 12 months of tribunal cases to understand what issues are coming up and what to do if you get charged an illegal fee:

  • A general rule is that as long as you have taken all reasonable steps to enter a tenancy agreement, but it doesn’t proceed, you should still get your holding deposit back. A couple of cases saw the tenancy fall through because it took too long to vet a guarantor, or the letting agent’s referencing company had technical problems, but the tenant was still protected.
  • If you have to pull out of an application because of personal reasons, you might still get a refund if your would-be landlord or agent has failed to follow the rules when taking a holding deposit. This happened in a couple of cases where the holding deposit was worth more than the maximum 1 week’s rent.
  • Agents can withhold the holding deposit if the tenant has provided false or misleading information. In a case in Berkshire, the tenants declared £42,000 of income but the referencing process could not verify the full amount. Luckily the tribunal found the tenants provided genuine information so they got their money back, but it’s a reminder for tenants to be clear about what your income is before you start applying for tenancies.
  • Several tenants challenged fees for ending their tenancy early and all got some money back – but the judges had different ways of calculating what was fair. One judge ruling on a case in London accepted the agent’s claim that the cost of setting up a new tenancy was £420, while another, ruling on a case in Oxford, said they could only charge £35 for an hour’s work to do this. Agents are required to publish their fees for situations like this, so it is worth checking what you might be charged if you have to move out early. It also helps if the departing tenant is able to find a new tenant to move in, saving the agent or landlord work.*
  • One case in London saw tenants challenge cleaning fees deducted from their security deposit at the end of the tenancy. This was the only case where the tenants didn’t get their money back. But we found it surprising that the tribunal would consider this type of case at all – as the deposit protection system exists to adjudicate disputes like this so might have ruled differently.

You can find out more about the Tenant Fees Act on our Know Your Rights pages, and what to do if you are struggling to get your holding deposit back. Tell us about any dodgy practices you spot here.

*The Renters (Reform) Bill, which has just been introduced to Parliament, proposes to scrap fixed terms entirely, which means that, eventually, ending a tenancy early will no longer be A Thing.


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