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?
Only the below:
- The rent: as stated in the tenancy agreement.
- A refundable tenancy deposit: capped at five weeks’ rent, where the annual cost is below £50,000.
- A refundable holding deposit: sometimes required to reserve a property, this is now capped at one week's rent. It can be retained for a maximum of 14 days before entering into an agreement.
- Bills: any cost associated with the running of the home, ranging from broadband and council tax to energy.
- Changes to the contract mid-tenancy: if requested by the tenant, these are now capped at £50.
- Late rent fee: interest 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: these 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.
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.
Tenants signing agreements before the ban came into force may have been charged the following:
- Administration fee of between £300 and £350: For drawing up a contract and other administrative tasks, such as issuing you with a copy of the contract.
- Reference checks of between £75 and £100 per tenant: For checking with references that you provide (an employer or former landlord, for example) that you are viable tenant.
- Credit checks of between £50 and £100 per tenant: For credit checks conducted through credit reference agencies, such as Equifax or Experian. These check you can afford to pay the rent, and are not in serious debt.
- Tenancy renewal fee of between £150 and £180: For renewing your contract at the end of a tenancy agreement if you decide to stay on in the property.
- Check-out fee of between £100 and £300: 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.
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.
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.