Tenant Fees

Summary of Tenants Charges from the 1st June 2019
Tenant Charges for Assured Short-hold Tenancies.

Reservation Fee: A reservation fee of 1 weeks rent to reserve a property. Please note: The reservation fee is non-refundable in the event that the applicant fails the right to rent checks, provides false or misleading information, withdraws their application or fails to sign the tenancy agreement within 15 calendar days (or other Deadline for Agreement as mutually agreed in writing). The reservation fee will be put towards the first month’s rent at the commencement of the tenancy.

Tenancy Deposit: A refundable Tenancy Deposit (capped at five weeks rent for rent not exceeding £50,000 per annum or six? week’s rent if greater)

Rent: 1st months’ rent (or greater if agreed)

Varying a tenancy: A charge of £50.00 may be levied unless we, as the agent, can demonstrate greater costs were incurred to implement the requested changes to vary, assign or replace a tenancy.

Surrender of Tenancy (covering the landlord’s costs in re-letting the property, all rent outstanding until a new tenant is found (up to the maximum outstanding rent on the tenancy)

Payments in the event of a default: A payment may be required in the event of a default (e.g. requesting a replacement for a lost key). The amount charged will not exceed the loss suffered by the landlord.

Late payment of rent: Interest at 3% above the Bank of England Base Rate from Rent Due Date until paid in order to pursue non-payment of rent. Please Note: This will not be levied until the rent is more than 14 days in arrears.

What types of tenancy does the legislation apply to?

In England, ASTs, student accommodation, and licences are caught by this. Company lets and non-assured tenancies are exempt.

What fees are prohibited?

The short answer is most fees are banned. The Tenant Fees Act 2019 (TFA) starts by prohibiting charging fees on virtually everything. It then creates a number of permitted fees which can be charged.

In England, the legislation bans anything that the tenant (or someone acting on their behalf like a guarantor or parent) is required to pay as a condition of the grant, renewal, continuance, variation, assignment, novation or termination’ of an assured shorthold tenancy or licence agreement.

This is a very broad definition, which means almost all fees are banned by default under the TFA. This definition also includes payments to most third parties, either for services throughout the tenancy or for specific performance of a job and loans from third parties.

Examples of banned fees then would be:

  • Charging for a guarantor form
  • Credit checks
  • Inventories
  • Cleaning services
  • Referencing
  • Professional cleaning at the end of the tenancy (England only)
  • Having the property de-flead as a condition of allowing pets in the property
  • Admin charges
  • Requirements to pay for an insurance provider
  • Gardening services

What fees are permitted?

Holding deposits, rent, security deposits and charges for defaulting on the contract are all exempted from this ban. However, all four are subject to additional restrictions as part of the legislation.

For England most required payments to third parties are prohibited, especially for agents. Landlords have slightly more freedom and can require the tenant to use a specific utility or communications provider.

Finally, landlords may charge for changing tenants, varying the tenancy or allowing tenants to vacate the property early.

When must a holding deposit be refunded in full?

Where the tenancy does not go ahead, but the applicant was truthful and timely in responding to information requests, then the money must be repaid in full within 7 days of the deadline being reached or the landlord backing out.

Repayment does not need to be in full if;

  • the applicant backs out before the tenancy agreement is granted;
  • fails right to rent checks and it was not reasonable for the landlord or agent to know they would fail;
  • the tenant has provided false or misleading information which would impact on the decision to let the property to them;
  • the landlord tries their best to get the information needed to proceed but the applicant fails to provide it within the 15 days;

Landlords and agents who choose to retain a holding deposit should protect themselves by making sure they have written evidence that they asked relevant questions on earnings, etc that will have an impact on their decision making in granting a tenancy.