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Tenant fees: which ones can you still be charged for?

Since June 2019, moving from one rented home to another has become cheaper. Post the ban on tenant fees, here’s what you should and shouldn’t pay.

June 1, 2019 marked a crucial change for renters in England.

It’s when the Tenant Fees Bill became law, which means it’s now illegal for letting agents and landlords to charge fees to renters.

Figures from industry body, ARLA Propertymark show that its letting agent members charged an average £202 per tenant before the ban – with costs often much greater in London.

The change in law also caps the amount letting agents can collect as a deposit.

Here’s an outline of what you can expect to pay as a renter.

What fees can renters be charged now?

Only the below:

  • The rent: as stated in the tenancy agreement.
  • A refundable tenancy deposit: capped at five weeks’ rent, where the annual cost is below £50,000.
  • A refundable holding deposit: sometimes required to reserve a property, this is now capped at one week’s rent. It can be retained for a maximum of 14 days before entering into an agreement.
  • Bills: any cost associated with the running of the home, ranging from broadband and council tax to energy.
  • Changes to the contract mid-tenancy: if requested by the tenant, these are now capped at £50.
  • Late rent fee: interest can be charged at no more than 3% above the Bank of England’s base rate for each day the payment remains outstanding, and only after 14 days.
  • Repairs: these should be charged at a ‘reasonable cost’ and evidence should be provided for the cost of repairs and replacement, during or at the end of a tenancy agreement.

What fees were tenants charged before June 1?

Fees charged to tenants were neither regulated nor uniform before June 1, which is why the Government intervened with the Tenant Fees Bill.

But, as a benchmark, tenants signing agreements before June 1, may have been charged the following:

  • Administration fee of between £300 and £350: For drawing up a contract and other administrative tasks, such as issuing you with a copy of the contract.
  • Reference checks of between £75 and £100 per tenant: For checking with references that you provide (an employer or former landlord, for example) that you are viable tenant.
  • Credit checks of between £50 and £100 per tenant: For credit checks conducted through credit reference agencies, such as Equifax or Experian. These check you can afford to pay the rent, and are not in serious debt.
  • Tenancy renewal fee of between £150 and £180: For renewing your contract at the end of a tenancy agreement if you decide to stay on in the property.
  • Check-out fee of between £100 and £300: For checking that everything on the outbound inventory is as it should be (ie, there is nothing missing, damaged or broken) and that the property is clean.

What if I am already in a tenancy agreement?

If you entered into a tenancy agreement before June 1, 2019 you can continue to be charged some relevant fees – such as a check-out or contract renewal fee – until May 31, 2020.

But after June 1, 2020, the tenant fee ban will apply to all tenancies, new and existing.

What happens if letting agents don’t comply?

If your landlord or agent charges a fee that is banned under the new rules, they will have 28 days to return it. And they could be fined £5,000 for a first offence.

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