The government has announced that the Tenants’ Fees Bill received Royal Assent on the 12th of February and will come into effect on the 1st of June, reports Letting Agent Today.
The government believe that the ban on landlords and letting agents charging fees to tenants will save the latter a total of at least £240 million a year – or an estimated £70 per household.
The law covers a number of fees typically charged to tenants – the main provisions of which now prevent:
- security deposits (against damage and breakages caused by tenants) of more than the equivalent of 5 weeks’ rent
- holding deposits (pending a formal tenancy agreement) of more than 1 week’s rent;
- charges in excess of the actual cost of repairing or replacing damaged or lost items – evidence of those costs may need to be provided;
- charges of no more than £50 for a change to a tenancy; but
- provision is also included in the law for tenants to recover charges which were wrongly made.
The new law also introduces financial penalties and fines for landlords or letting agents. A first offence may attract a fine of up to £5,000, but the offender may also face criminal prosecution if a similar offence has been committed within the past five years. As an alternative to prosecution, a fine of up to £30,000 may be imposed.
The funds raised through the financial penalties imposed will be made available for local authorities to use in the enforcement of other housing rules and regulations.