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Tenant Fees Bill to come into force in June


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4 Feb 2019

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Changes to letting fees will come into force in England on 1 June 2019, the government has announced.

 

The Tenant Fees Bill, which will bring in a wealth of changes to the buy-to-let sector including outlawing letting fees, had its third reading in the House of Lords last week and is set to be given Royal Assent soon.

 

The ban on lettings fees would apply to all tenancies signed after 1 June this year and will then roll out to pre-existing tenancies from June 2020.

 

From that date, any clauses in the agreement that permitted charges outlawed by the bill, will become ineffective.

 

Once the bill is greenlit, if a landlord or agent makes a charge that relates to a banned fee, they must return the money within 28 days or be in breach of the law.

 

Among the fees that will be banned are, charges for a guarantor form, credit checking, and inventory checks, domestic cleaning fees, following up references, professional cleaning, and admin costs.

 

Agents and landlords have been bracing themselves to absorb the squeeze in income, with some saying the extra cost may be passed onto tenants in the form of higher rents.

 

The fees ban has been in place for some time in Scotland where agents and landlords have been forced to adapt to a different business model since August 2016.

 

On its final reading, two minor and technical amendments were tabled by the Government and both were passed, relating to interest payments owed by landlords or letting agents to enforcement authorities.

 

A statement from the Ministry of Housing, Communities and Local Government said:

“We believe these amendments strike a fair balance between improving affordability for tenants whilst ensuring that landlords and agents have the financial security they need.”

 

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