tenant fee ban information
14th March 2019 by Property Deal Store Administrator in Investors, Legislation

Tenant Fee Ban – All You Need to Know

From 1st June 2019, landlords and their agents will no longer be able to charge their tenants, or prospective tenants, administration fees.

The primary fees which are exempt from the ban, and can therefore still be charged, are:

  • Holding deposits
  • Deposits
  • Rent

Even these exempt fees will be subject to certain restrictions though. Holding deposits will be restricted to a maximum of 1 weeks rent. Deposits a maximum of 5 weeks rent, unless the rent is in excess of £50,000 per annum, in which case the maximum deposit is 6 weeks rent.

Rent itself will also be restricted in terms of the manner it is charged. For example, landlords won’t be permitted to charge an increased rent for a specific period and then lower it in an attempt to recoup lost earnings as a result of these changes.

Less common exemptions

Should a tenant default on the tenancy agreement, landlords can still seek compensation as they can do now. Fines for things like lost keys or late payments can also be levied providing they are ‘reasonable charges.’ Fees can also be levied for changes to the tenancy agreement, if requested by the tenant. These are to be capped at £50.

Utilities and council tax can also be charged by the landlord providing they are services included with the tenancy.

All other fees levied to tenants will be banned.

The penalties are severe

If, as a landlord, you are found to be charging non-exempt fees for tenancy agreements signed on or after 1st June, you are liable for a £5,000 fine for a first offence. After that, if you are found to be in breach again, you face an unlimited fine and possibly further sanctions.

Potential reactions

As with all new legislation, there is a chance that the industry will adjust to recover lost revenues from other sources. It is possible that some landlords will increase their rents to recover tenancy administration fees that landlords themselves will now need to cover.

Another question is, how will letting agents react? Will they increase their pricing for landlords to make up for their lost earnings? If so, will this again push up rents?

A lot remains to be seen, but as a landlord, it’s definitely worth considering now how you will prepare for these changes. Can you cover any additional fees, such as credit checks, with ease? Or will you need to consider changing your business model to cover additional costs?

Where to go from here

As with all pending legislation changes, you would be best advised to keep up to date with developments. The government have now announced that the tenant fee ban will be in force from 1st June, and they will soon be releasing more guidance for tenants, landlords, and letting agents about how the changes will affect the different groups.

We will also keep you up to date with any major changes via our blog and on our social media channels, so make sure you are signed up to Property Deal Store for updates! Why not connect with us on social too and keep up with all things property…



– Chris Faulkner, co-founder and director, Property Deal Store

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