Tenancy fee ban and how it affects Agents / Landlords

The Tenants Frees Act came into effect in June 2019 to protect tenants and applies to all new or renewal of tenancy agreements signed after this date. The Act limits the upfront fees that agents and landlords are allowed to charge tenants and non-compliance can lead to an initial fine of £5,000 and a maximum of £30,000 and possible legal action for continued non-compliance.

Under the Act, agents and landlords cannot charge upfront fees to tenants for services such as registration fees, viewing fees, administration fees, and any kind of fee associated with setting up a tenancy, including tenancy renewal fees. Most of these fees were deemed unnecessary and were seen mostly as a means for letting agents to earn additional income.

The criticism of the Act is that the abolition of these fees would in turn simply lead to increased rents, but in most cases the costs associated with tenancy have been absorbed by the agents and landlords. Granted, some agents may have raised fees, and this may have led more landlords to manage their own properties, but the Act has led to more transparency in fees for tenants. The full Act and guidance documents can be found on the GOV.UK website, which also lists all the permitted and prohibited payments.

Landlords can of course charge fees for services such as replacing lost keys, ending a tenancy early, late rent fees, and check out cleaning fees. But some of these fees are capped and need to be clearly stated in the tenancy agreement. All parties, agents, tenants and landlords benefit from a transparent fee system.

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