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What are the new amendments to the Tenant Fees Bill?


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19 Dec 2018

 What Are The New Amendments To The Tenant Fees Bill?

 

Amendments to the Tenant Fees Bill, set to become law in 2019, were debated and approved in the House of Lords on 11 December.

 

The bill now enters a third reading, which is a chance to 'tidy up' it up and make any further changes.

 

A date for this is yet to be scheduled, but in the meantime, here's what you need to know about those proposed amendments

 

Security deposit limit set at five weeks’ rent

This new amendment limits the maximum security deposit to five, rather than six, weeks’ rent for tenancies of less than £50,000 per year - for tenancies over that figure, the threshold will remain at six.

 

The six-week rent deposit was believed to have been agreed after a compromise was found between the government's preference for a maximum of four weeks and landlords’ groups’ call to allow landlords to ask for six weeks’ rent as a deposit.

 

But ministers U-turned a few weeks ago, despite opposition from the chancellor Philip Hammond to hold the line at a deposit of six weeks’ rent.

 

According to the Landlord's Association, the average security deposit landlords ask for is 4.2 weeks, so this amendment will not affect everyone, but the group have raised concerns that the five-week cap does not allow flexibility for tenants who may pose a higher risk, such as those with pets or who have a poor credit rating.

 

A tightening of the default fee clause

The default fees clause is intended to allow landlords to recoup costs   that have left them out of pocket during a tenancy. But campaigners who fought for this amendment said the default clause as it currently stands is open to abuse and required further definition. The proposed amendment allows landlords and agents to charge ‘default fees’ only for explicit expenses, such as the replacement cost for a lost key and late rent payment, where the tenant is at fault.

 

Changes to holding despotis

This amendment restricts landlords and agents to taking one holding deposit for a property at a time. They must pay the first prospective tenant’s deposit back in full before taking a second holding deposit, unless the tenant is in breach of the terms - such as providing false information. In this case, landlords and agents must explain to the tenant in writing to explain why they are retaining their deposit.

 

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