A few weeks ago, we posted an update on the Tenant Fees Bill. We have since received a number of phone calls asking for more details on what agents can and cannot charge tenants for. Note that the fee ban does not apply to landlords. Unfortunately, the Bill could still be amended and as such it is difficult to provide a definite list of charges that will be banned and charges that may not. With that in mind we provide below an example of charges we believe may be banned once the Bill becomes law. This list is not exhaustive and is subject to change:
- Credit checks
- Charges for permission to keep a pet
- General administrative fees for example for telephone calls
- Charging for a guarantor form
- Charges for service of notices
- Charges for drawing up the tenancy agreement
- Charges for Right to Rent immigration checks
- Charges for renewing your tenancy
- Charges for a change of tenant
- Charges for early termination under a break clause
- Charges for a professional clean
This means the fees that can be applied, that is the fees that are exempt from the ban are:
- Holding Deposits
- Utility payments
- Payment for tenant default associated with lost keys or late rent.
The fees that are permitted are subject to certain restrictions so this will need to be kept in mind when applying them. An example of such a restriction is Rent cannot be higher at the beginning of the tenancy in order to offset the ban on fees. Artificially increasing the rent and then reducing it when the cost of fees has been recovered is not permitted. Deposits are also restricted to 5 weeks rent where the annual rent of the tenancy is £50,000. Where the annual rent is above £50,000 the deposit can be 6 weeks rent, see our previous post on here. Finally charging tenants for a breach will need to be reasonable.
It is important to appreciate that at this stage these lists are not guaranteed and are subject to change. We do hope that definitive lists will be available in the early part of next year when we will update this post as soon as possible.