On the 1st of June 2019, the Tenant Fees Act came into force.
By Fraser Gregory | Created on 1st August 2019
The Act targets rogue landlords, but many law-abiding landlords are concerned about the implications to their business.
London Landlords – Complying With Tenant Fees Act?
Being a landlord is tough. There is a lot of demand for rental accommodation in London, but there is a lot of challenges to overcome. For many London landlords, the biggest issue they face is dealing with regulations. There have been many regulatory upgrades and changes in the letting industry, and the changes keep coming.
On the 1st of June 2019, the Tenant Fees Act came into force. If a landlord takes an illegal payment from their tenant, they must pay this back in 28 days. If the landlord fails to pay the money back in this time, they breach the Act,
The Tenant fees Act covers fees such as:
Credit checks on prospective tenants
Referencing tenants
Carrying out an inventory check at the start of the rental process
Checking tenants in and out
Cleaning the property
Gardening
Administrative charges
The Act targets rogue landlords, but many law-abiding landlords are concerned about the implications to their business. The Act aims to support tenants, making the rental process more affordable. The Act has a considerable focus on the initial period in the rental process. The changes are great news for tenants, but many landlords have genuine concerns about how the Act impacts their business.
Many of these charges relate to essential tasks in the rental process. Landlords should still vet tenants and obtain references. Sadly, the cost of this work must now be fully absorbed by the landlord, and this is why so many landlords in London, and across the country, have concerns about the process.
What fees can landlords charge?
There are still fees landlords can charge. Landlords can charge the monthly rental fee, a holding deposit, a security deposit, default payments, and where the tenant requests a change to the rental agreement.
For third-party fees or issues where the landlord has incurred a charge, the landlord can only recoup the money they have spent. If the tenant loses their keys, and the landlord gets a new set cut, the landlord can only charge the cost of the keys. The landlord is not permitted to charge an additional fee on top of the cost of the key cutting service. Landlords are advised to retain receipts, so they can verify how much the service has cost them.
Holding and security deposit changes
The new cap on holding deposits stands at one weeks’ rent. When the prospective tenant pays the holding deposit, the landlord has 15 days to decide if the tenant should move into their rental home. If the landlord chooses against allowing the applicant to move into their rental property, they should return the money in seven days.
If the applicant made a false claim, withheld information or failed any check carried out by a landlord, the landlord doesn’t have to pay back the full amount. If the application is successful, the application should be paid back within seven days but is often used towards the first months’ rent or the security deposit.
For the security deposit, the new cap is five weeks’ rent when the annual rent is less than £50,000; and when the yearly rental fee is £50,000 or more, the new cap is six weeks’ rent.
If you are a landlord looking for guidance to let in London, contact Plaza Estates, and we’ll be happy to help you.
Looking to Sell or Let?
Begin your journey with a free property valuation.
Get the facts and figures to make informed decisions.
Property Valuation
"*" indicates required fields
Got a question?
If you want to know more contact us,
and we’ll be happy to help you.
Contact Us
"*" indicates required fields
Share
Fraser Gregory
I started my career in 2008 at one of the largest agencies in the UK before taking the leap into the independent agency sector. I joined Plaza in 2012 and I’ve never looked back. Being part of a boutique family owned agency has been such a rewarding experience allowing me to be involved in every aspect of the lettings process. I have developed my skill and knowledge over the years by successfully passing the NFOPP Technical Award in Residential Lettings and Property Management. A nationally recognised qualification of Propertymark; The National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (ARLA) I’m proud to be part of a company that has been involved in the community for nearly 50 years.
If you want 5-star reviews and want to remove negative reviews from Google, contact me via my profile; my contact details are listed there.
SM
Dear Eitan
In this whole sorry saga, with headbutting, unproactive lawyers, and a comatose estate agent etc etc, you have been a beacon of light throughout. Efficient, professional and responsive. This would never have got done without you.
Thank you.
All the best.
Maurice Shasha
We have been using Plaza Estates for many years for all our property requirements (sales, letting and management) and are delighted with the results and service they constantly deliver and provide!
KS
I generally dealt with the Marble Arch branch most of the time, but I can also say that the Knightsbridge office was also exceptionally helpful and professional on the occasions I did deal with them. Plaza Estates in general are excellent.
YZ
Have interacted with Plaza Estates across a couple of sites and always been impressed. Maurice must be the hardest working, most dedicated, helpful and knowledgeable account manager for any company anywhere! A real asset to the team!
LI
I have been a client of Plaza Estates for over 30 years and received excellent service. Both Rodney on the rental side and Fiona in the property management area have been have been attentive and helpful and always willing to go the extra mile on the few occasions when there were problems.
SA
Hope both of you are doing well. I wanted to thank you for always being there for us and for addressing our concerns promptly; safe to say you have been the best agents I have had the pleasure of interacting with.
KR
We have owned our Flat since 2008, which we purchased through Plaza. Our relationship with Plaza goes back to 1982 when we purchased a nearby flat and Plaza have handled all our lettings since then. I would have no hesitation in recommending Plaza - they will find you a good tenant and ensure your ...
MS
Thank you again for all your advice and calm attitude and charm. Nobody could try harder than you, and for which, we really thank you and appreciate it all, not just now, but over the years.
Thanks again for everything!
LT
Thank you for your kind help and your advice, it's been precious!
