After years of waiting, England's Tenant Fees Ban is finally here. It means that letting agents and landlords won’t be able to charge extortionate fees when you move to a new home. Here are the top 6 things you need to know about the ban:
1) It applies to contracts signed after 1st June 2019
The act covers anyone entering new tenancies from 1st June 2019. If you signed before the 1st June then you might have to pay renewal or check out fees if the contract specifies this - but only until 31 May 2020.
2) It means landlords and letting agents can only charge you for certain things
These include your rent, a refundable holding deposit, a refundable security deposit, a change of contract fee (like adding a new housemate), ending the tenancy early, lost keys and interest on rent that is two weeks’ late*. So say goodbye to reference fees, inventory fees, and “any day that ends with y fees” - an average saving of £404.
3) Your security deposit will be capped at 5 weeks’ rent**
And the great news is that if you have paid more than this, you are entitled to a refund of the difference if and when you renew!
4) You’re protected when you put down a holding deposit
Letting agents can’t waste your time by taking holding deposits from more than one tenant for the same property at the same time. And if you’re asked to sign a tenancy with unfair terms you can pull out and get the payment refunded.
5) The fees ban means some letting agents will be finding new, sneaky ways to make cash
You might be offered a “zero deposit option” instead of paying a deposit upfront. Whilst this might sound like a good thing, these monthly options are non-refundable and don’t cover you if your landlord claims damage at the end of your tenancy. You can read more here about why Generation Rent advises against these.
6) You still need to watch out and know your rights
A group of Generation Rent volunteers called the Letting Agent Detectives found 21 agents breaking the law on advertising their fees. There will be some agents out there who assume they can pull the wool over renters’ eyes. If in doubt, take a look at the government guidance, seek legal advice, or report dodgy behaviour here.
*The landlord can generally only claim back their reasonable costs. Interest can be charged at a maximum of the Bank of England base rate plus 3%.
**Unless you’re lucky enough to be able to afford rent of £50,000 per year, in which case it’s 6 weeks.