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How the Tenant Fee Ban impacts landlords and tenants in Chester -

All rental properties in England will be impacted by the new Tenant Fees Act, which came into force on 1st June 2019 — here’s what the tenant fee ban means for landlords and tenants in Chester.

What is the Tenant Fees Act?

The Tenant Fees Act 2019 is a ban on any charges to private tenants either to begin, renew or end their tenancy. It applies to any tenancy signed after 1st June 2019 or renewed after this date. It will apply to all tenancies from 1st June 2020. It’s aimed at reducing the initial cost of renting and creating a fairer rental market for tenants.

What fees are banned?

The Act sets out to prohibit all fees, charges and loans to begin, renew or continue a tenancy. This includes fees for insurance and third party services like inventory or credit checks.

Within this, the Act has banned tenancy set-up fees (now the landlord must pay the agent for these) and tenancy check-out fees (unless caused by early termination of contract).

What payments are allowed?

There are a number of ‘permitted payments’ outlined in the Tenant Fees Act. These include rent, utilities (where these are part of the rental agreement), tenancy deposits and holding deposits.

Tenant Default Fees can be charged for damage to property, breach of contract or lost keys. A Tenant Default Fee is also permitted for late payments (for rent more than 14 days late) which is calculated at the Bank of England interest rate + 3%.

Fees for changes to tenancy agreement, known as a Novation of Contract, are capped at £50.

How are deposits affected?

Under the new legislation, a holding deposit can be no more than one week’s rent. Once a holding deposit is paid, the landlord is legally obliged to take the property off the market.

Tenancy deposits are capped at no more than five weeks’ rent where annual rent is up to £50,000, or six weeks’ rent where annual rent is above £50,000.

Find out more

There are potential penalties to non-compliant landlords of £5,000 (and up to £30,000 for repeat offenders).

Want to make sure your rental property is compliant with the Tenant Fees Act? Contact our Lettings Team about how we can help. With over 30 years’ experience in the Chester rental market, we are well placed to advise landlords on how to stay compliant with new Landlord and Tenant legislation.


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