Since 2019, it has been illegal for letting agents and landlords to charge tenants fees for starting a tenancy - and for renewing one, and ending one.
Tenants can challenge illegal fees at a Tribunal, and we recently discovered one of the biggest names in the property world, Foxtons, was ordered to refund tenants whom they charged illegal fees.
Foxtons are somewhat notorious for unfair practices - earlier this year a tenant faced eviction because Foxtons charged her landlord more than £7000 to switch letting agents. In 2019 Foxtons gave a couple the keys to a one-bed flat after they had signed up for a two-bed.
The Tenant Fees Act came into force in June 2019. It bans letting agents from charging tenants anything other than rent, refundable deposits, and very tightly defined fees that arise outside the normal course of the tenancy, such as lost keys and moving out early.
From our analysis of Tribunal cases, the most common offence under the Tenant Fees Act involves withholding the holding deposit. Tenants can be particularly vulnerable to this at a time of heightened stress while you’re trying to find a new home. We have a specific page covering your rights on this which you can read here.
If you are charged an illegal fee, which includes holding deposits withheld without good reason, you are protected from a Section 21 eviction, and can apply to the First-Tier Tribunal for a refund. All tribunal decisions are published online and can be found here.
One case from April this year concerned three people who rented a flat in Wandsworth, SW London, from Foxtons for eight weeks in autumn 2021. Foxtons charged each of them £250 on top of the rent. Foxtons’ justification for this was that it was a “short term let.” The Tenant Fees Act applies to assured shorthold tenancies (ASTs) and licences to occupy (which are used in arrangements such as property guardian schemes). Foxtons advertises fees for “non-Assured Shorthold Tenancies/non-Licences”.
However, while ASTs usually have a minimum of six months, the Housing Act that created them says that tenancies are ASTs unless they have specific exemptions such as:
- Rental value of £100,000 or more (or £1900+ per week)
- Let to a company rather than individuals
- Holiday lets
The tribunal concluded that the tenancy met the legal definition of AST. Result: a £750 refund for the tenants. Not a bad result especially given that tenants often don't feel like they are fully supported.
We’re pleased to say that most tenants who challenge a fee under the Tenant Fees Act get their money back, so give the tribunal website a read if you ever need a pick-me-up!
A supporter of ours, Tom, recently started a petition calling on Foxtons to stop charging these dodgy fees.