Landlords have had many regulatory issues to contend with, but few have caused as much upheaval as the Tenant Fees Ban. This Act came into force on June the 1st 2019, and landlords have had to change their working practices.
Of course, the Act is currently only applicable for Acts that came into force on or after that date. For tenancies that existed before June the 1st, the Act doesn't go into effect until June the 1st 2020. For these tenancies, the landlord can accept fees until May the 31st, but any fees collected after this date is regarded as a prohibited payment. Landlords must return prohibited payments within 28 calendar days.
There is a lot of uncertainty for landlords with the Tenant Fees Ban
One of the biggest issues landlords have to contend with is uncertainty about certain elements. There is a lot of information regarding holding deposits, how much can be charged, and how or when a landlord has to repay these deposits.
If a tenant provides false or misleading information in their application, the landlord has to prove the candidate submitted factually inaccurate details. A failed reference isn't enough of a reason to retain the holding deposit, and if the landlord cannot establish the applicant submitted incorrect data, they must return the deposit in the agreed timescale.
It is still possible to charge a higher rental fee for tenants with pets
The deposit cap, set at five weeks rent or six weeks rent when the annual fee is more than £50,000, has led many landlords to refuse tenants with pets. Given that pets are usually responsible for additional damage in a rental property, increasing the cleaning costs at the end of tenancy, many landlords believe the capped deposit level is insufficient to justify allowing tenants with pets to stay.
It is permissible for landlords to state a rental fee for tenants with pets, and a separate (and invariably lower) price for tenants without a pet. With many tenants struggling to find suitable accommodation when they have a pet, some will decide that paying the additional rental fee is acceptable to ensure they find a suitable home for all their loved ones.
What fees can a landlord charge?
When it comes to knowing which fees are permissible and which aren't, it is best to assume that all charges are illegal apart from directly stated permitted payments. Examples of allowed amounts include a capped and refundable tenancy deposit, a capped and refundable holding deposit, default fees, fees relating to changing tenancy details, assigning a tenancy or terminating a lease. Landlords can also charge tenants for council tax, utility bills, TV licence, communication services and the Green Deal charge if applicable.
If you want to charge a tenant for a service or issue that isn't listed above, likely, you will not be legally allowed to do so. Therefore, landlords should review their working practices and ensure they generate sufficient rental income to pay for their services.
If you are a Sunderland or South Shields landlord, or a landlord anywhere in the North East, coming to terms with the Tenant Fees Ban, contact SK Property Management, and we'll be more than happy to assist you.