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Guidance Note

April 2019

The Tenant Fees Act 2019 comes into force on the 01 June 2019. This Act is wide ranging and will have a considerable impact on the private rented sector in England.

Assured shorthold tenancies, licences to occupy (excluding social housing) and student lettings in England granted on or after 01 June 2019 will be affected. If a tenancy was granted before the 01 June 2019, payments which may be prohibited under the Act can still be charged but only until 31 May 2020. From the 01 June 2020, all tenancies and licences (previously referred to) will be caught by the Act.

Under the Act:

1. Certain fees (including letting fees) are banned from being charged to a tenant (these costs must be fronted by the landlord);

2. Security and holding deposits will now be capped and strict timeframes have been introduced for repayment of the holding deposit;

3. The Consumer Rights Act 2015 has been amended requiring all letting agents who advertise on third party websites (such as Zoopla and Rightmove) to publish their fees on these websites or add a link to where their fees are published.

If a landlord or letting agent fails to comply with the Act, they will face fines of up to £5,000 for a summary offence and further fines or a criminal conviction for repeat offences.

It is important that residential landlords and letting agents are prepared for these changes and should ensure that their business models, internal practices and procedures are compliant with the Act when it comes into force on the 01 June 2019.

New Guidance on the Tenant Fees Act 2019

We have now published a Guidance Note which summarises the key provisions of the Act; which tenancies are affected, which payments can be charged to a tenant and which are prohibited, the new rules on holding deposits and security deposits and the penalties and consequences for non-compliance.

This Guidance also looks at the practical steps a landlord and/or letting agent can take to ensure compliance with the legislation.

As a result of the wide impact the Act will have on the private rented sector in England, several of our template documents on the Property portfolio are being updated, most notably the Assured Shorthold Tenancy (AST) Agreements and they will be uploaded before the Act comes into force.

The Renting Homes (Fees etc.) (Wales) Bill, has passed through the Welsh Assembly and is awaiting Royal Assent. Similar provisions to the Tenant Fees Act 2019 are proposed under this Bill. We will produce further guidance and updated documents once this Bill has been made into law.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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