I own two houses in Cambridge that I currently rent out. I have heard there are some new regulations on the fees that can be charged to tenants. I don't want to fall foul of any new rules - can you advise me how the rules have changed?
From 1 June 2019 there will be a new system of charging fees to the tenant by the landlord and agent, which will effectively bar most fees which are presently charged to tenants, from being charged in the future. This will assist tenants financially and may squeeze landlords, and especially agents alike. It is called the Tenant Fees Bill which is presently being passed through the House of Commons and is receiving Royal Assent.
The key points to the Bill are, amongst other things, that letting fees will be banned. The landlord will only be able to charge rest, deposit specific default fees, frees for variations, assignment or novation, and damages. Further tenancy deposits will be limited to five weeks, and holding deposits will be limited to one week's rent. Default fees can only be charged in respect of rent arrears, which interest is now limited to a maximum of 3% above the bank of England base rate, and lost keys, which is limited to only the cost of replacement keys and reasonable other costs incurred. The landlord and agent can charge for varying a tenancy agreement but this must be capped at £50.00 Finally, where a breach of regulations is outstanding a landlord may not serve a Section 21 notice to terminate the tenancy.
The changes are being made to prohibit landlords and agents from carrying out what could be deemed to be sharp practice, and encouraging full transparency for the tenant. If the landlord or agent run foul of the new Tenant fees Bill enforcement will be carrie3d out by the local authority and can include a fine of up to £5,000 for a first offence, and up to £30,000 for repeated offences.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.