With the advent of the Tenant Fees Act 2019 (2019 Act) many agents have been trying to find ways to manage pets in rental properties. A logical solution is currently receiving a lot of bad publicity but landlords have been left with little or no option.
Under the 2019 Act deposits are limited to 5 weeks where the annual rental is less than £50,000 or 6 weeks where it is £50,000 or more. Accordingly, tenants with pets are now considered a higher risk because landlords are no longer entitled to request an additional deposit for the pet. The limitation on the deposit makes these tenants a higher risk which means that they are probably finding it much more difficult to obtain private rental properties.
With the 2019 Act drafted the way it currently is, there is no way of covering the risk a pet poses to a property. Such risks would include a pest infestation and an enhanced risk of property damage as well as the possibility of lingering odours or allergens such as pet hair. This situation is something the government was warned about however, it is something that they elected to ignore.
Therefore, one solution to the problem appears to be a higher rent for tenants with pets referred to as ‘pet rent’. This means that a tenant without a pet may pay for example £1000 pcm for a property but a tenant with one pet will have to pay £1050 pcm that is an additional £50 pcm rent for each pet. The advantage for tenants is that this solution offers them the opportunity to rent properties they would not now be able to rent. However, the disadvantage is that landlords can no longer add an additional amount for pets to the deposit. This means that now landlords retain this additional money for pets whereas before it was added to the deposit and returned if at the end of the tenancy there was no pet damage.
This solution has attracted a lot of negative publicity but at the moment appears to be lawful because the 2019 Act allows you to charge rent and doesn’t have a restriction on charging different rents to different tenants. However, it does have a restriction on charging a higher rent in the first month. Therefore, if the rent is higher because a tenant has a pet, agents must ensure that it is advertised clearly and is transparent in order to ensure compliance with the Consumer Protection from Unfair Trading Regulations. Where the agent fails to advertise it clearly and transparently, they could face an unlimited fine and/or imprisonment.
The 2019 Act has only been in force for a few months. Therefore, landlords and agents are likely to face many more issues regarding ‘permitted payments’ which could lead to further negative publicity. Until matters are brought before the courts it is all open to interpretation.