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Reminder – Tenant Fees Act

The Tenant Fees Act came into force in England in June 2019 but only applied to tenancy renewals and new tenancies. In June 2020 it will be extended to apply to all tenancies, that is tenancies which commenced prior to 1 June 2019. Our previous posts can be read here.

The Act bans landlords and agents charging tenants fees for entering, renewing, assigning or novating or terminating a tenancy. At present landlords and tenants are permitted to charge fees for tenancies which commenced prior to 1 June 2019. However, on 1 June 2020 this will no longer be the case even where there is a contractual term in the tenancy agreement permitting payments that are otherwise banned under the Act.

Under the Act where the annual rent is less than £50,000 a deposit is capped at 5 weeks rent for tenancies which are executed or renewed on or after 1 June 2019. Where the rent exceeds £50,000 the deposit is capped at 6 weeks rent.

Interestingly, the Act will not apply to deposits which were taken prior to 1 June 2019. This means that where a deposit has been taken prior to 1 June 2019 despite this change the cap will only apply if the tenancy was renewed after 1 June 2019. If the same tenancy has simply rolled on since before 1 June 2019 then no deposit cap will apply.

The Act brought about a huge change for landlords and agents and how they run their businesses. There is evidence that many agents are still not in compliance with the Act and enforcement bodies will be likely to pursue more action. The Act will no doubt bring even more change in the financial structure of the agency market. There is still time to make changes but agents who have not considered their position under the Act must do so promptly or they risk fines.



The contents of this blog post is not legal advice and is provided for general information purposes only. If legal advice is needed readers should contact a solicitor. No responsibility for any information contained within this post is accepted and PainSmith solicitors accepts no liability in respect of the contents or for action taken based on this post.

Published 14 January 2020

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