When the Tenant Fees Bill became law in June 2019, it made it illegal for letting agents and landlords to charge certain fees to renters.
Most tenancy fees are now banned. But it can be confusing to know what you can and can't be charged for when you find a new rental home.
Here's an outline of what you can expect to pay as a renter.
Which fees can renters legally be charged?
As a tenant in England, you can legally be charged for the following:
the rent, as stated in the tenancy agreement
a refundable tenancy deposit (also known as a security deposit): this is protection against any breaches of the tenancy agreement. It’s capped at five weeks' rent, or six weeks if the annual rent is over £50,000
a refundable holding deposit, which is capped at one week's rent and sometimes required to reserve a property. It can be retained for a maximum of 14 days before entering into an agreement
bills: Utility bills, TV licence, Council Tax, and any other costs associated with running the home — from broadband to energy
changes to the contract mid-tenancy if requested by you are capped at £50
interest on late rent can be charged at no more than 3% above the Bank of England's base rate for each day the payment remains outstanding, and only after 14 days
repairs which should be charged at a 'reasonable cost' and evidence should be provided for the cost of repairs and replacement, during or at the end of a tenancy agreement
rent in advance: in most instances, you'll also need at least one month’s rent sitting in your landlord’s bank account. There’s no limit on how much advance rent a landlord can ask for. If they request more and you’re not comfortable with that, ask them to reconsider.
You'll usually need to pay a holding deposit, a security deposit, and at least one month’s rent in advance before moving in.
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Which fees are banned?
Fees charged to tenants were neither regulated nor uniform in the past, which is why the government intervened with the Tenant Fees Bill.
You can not be charged for:
administration such as drawing up a contract and other administrative tasks, like issuing you with a copy of the contract. This used to be charged between £300 and £350 before the new rules came in.
reference checks for checking that you are viable tenant, which used to be charged at between £75 and £100 per tenant.
credit checks with credit agencies to check you can afford rent and are not in serious debt. This used to be charged at between £50 and £100 per tenant.
tenancy renewal at the end of a tenancy agreement if you decide to stay on in the property. This used to cost tenants between £150 and £180.
moving out inspections for checking that everything on the outbound inventory is as it should be (ie, there is nothing missing, damaged or broken) and that the property is clean. This cost between £100 and £300 before the bans came in.
What if I am already in a tenancy agreement?
The tenant fee ban applies to all tenancies, new and existing. You should not be charged any of the fees that are banned, no matter when your tenancy started or ends.
What happens if I am charged fees anyway?
If your landlord or agent charges a fee that is banned under the new rules, they will have 28 days to return it. And they could be fined £5,000 for a first offence.
If you have been charged a banned fee, you can report your landlord or agent to trading standards. If they break the rules more than once, they could be prosecuted by the council and banned from renting out properties in the future.
It is also worth knowing that your landlord can't serve you a section 21 eviction notice if they've charged a banned fee unless they have refunded your money.
When can a landlord sell their rental property?
What are deposit protection schemes all about?
Some costs, such as repairs, might be deducted from your deposit.
By law, all assured shorthold tenancy deposits must be held in one of the government-backed deposit protection schemes. They are designed to keep your money safe until the end of your tenancy.
There are three schemes in England and Wales and separate ones serving Scotland and Northern Ireland. Your landlord has 30 days after you’ve paid the deposit to prove it’s been put into a protection scheme.
They work in one of two ways: either the scheme holds the deposit for free (known as custodial), or you, the agent or the landlord holds it and pays the scheme a small fee to protect it (known as insured).
Either way, the scheme will resolve any disputes at the end of the contract and both parties must agree on the amount due back before it is repaid.
Guide to deposit protection schemes