The Tenant Fees Act 2019, which came into effect earlier this year, limits the amount a landlord, or letting agent, can charge in tenant fees. The Act was put in place to help tenants avoid paying high fees for deposits, etc.
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Good News for Tenants – a Rebate
In fact, the good news is that tenants across the country are already benefiting from the regulation. When it comes time to renew their tenancy, many people are finding that their tenancy fees are higher than the limit allowed under the new regulations. As a result, tenants have started receiving rebates for tenancy fees that are over the limit. The average rebate is about £320, which is a nice sum.
The new regulations were put into effect to keep letting agents and landlords from charging high fees to tenants in England. In fact, the ruling has benefited some 4.7 million households who live in rental housing. The Act makes it illegal to overcharge tenants with fees when signing up for new rental or when renewing their rental contract.
In the past, some tenants faced charges for viewing a property, getting a reference check or renewing their contract. On the average, similar fees could cost another £300 or more onto move-in costs.
The Tenant Act—The Goal
The goal of the Tenancy Act is to not only reduce move-in fees, but also to reduce the costs associated with rental property throughout the tenancy period. In fact, tenants are now able to see exactly how much a property’s rent will cost, with no hidden fees.
The Act also gives local enforcement authorities the responsibility to enforce the regulation, which started back in June 1st of this year.
Under the new act, landlords can charge tenants:
- Refundable tenancy deposit, which can cover no more than 5 weeks’ rent (for properties that rent for £50,000 or less) and 6 weeks’ rent properties with an annual rent of £50,000 or more.
- Refundable holding deposit, no more than 1 weeks’ rent
- Early termination of tenancy payment
- Utilities, communication services, TV license and Council tax
- A default fee for late payment of rent and lost key replacement (where required under a tenancy agreement)
Fears the Act Could Raise Rents
Before the Act came into effect, many landlords and letting agents warned that they would face higher costs, which would ultimately be passed onto tenant in the form of higher rent.
While this may be true, many see the regulation as a boon to tenants who no longer face hidden costs when moving into a rental property. In addition, tenants now have more rights to negotiate rent increases and repairs, etc.
So far, tenants are experiencing the benefit of the Tenant Fees Act in the rebate of overpayment of tenancy fees. This is great news for tenants in the long run, who will now find it cheaper to move into a rental property without having to go into debt.
Find out more about this act and guideline by visiting the government website