The Letting Agent Fees Ban in the UK

Following the Tenant Fee Ban Act, it is now illegal for letting agents and landlords to charge certain fees to renters.

Whether you are a landlord, letting agent or tenant, it is helpful to know what you can and can’t charge for when renting a home.

What is the Tenant Fee Ban Act?

The Tenant Fee Ban Act came into force on 1st June 2019 and made it illegal for letting agents and landlords to charge any non-permitted fees.

As part of the legislation, deposits were also capped, reducing the amount that renters pay upfront.

From 1st June 2020, these new rules apply to all tenancies, including those signed before 1st June 2019.

Which fees can tenants be legally charged for?

Landlords and letting agents can still charge for:

The rent – The amount of rent should be split equally across the first year of the tenancy. Landlords are not permitted to recoup the costs of banned fees by charging more for the first month’s rent.

A refundable holding deposit – paid to reserve the property and now capped at one weeks’ rent. It can be retained for up to 14 days and must be fully refunded unless the applicant made a false claim or withheld information.

A refundable tenancy deposit – capped at five weeks’ rent, where the annual rent is below £50,000. Security deposits are capped at six weeks for properties with a yearly rental value of over £50,000. Landlords can no longer charge a higher deposit for tenants who have pets in the property.

Interest on late rent payments – charged at not more than 3% above the Bank of England’s base rate and only after 14 days.

The cost of replacement keys – landlords must provide a receipt for the costs incurred.

An admin fee to cover changes to the contract mid-tenancy – only if requested by the tenant. For example, changing a sharer on a joint tenancy agreement or keeping a pet. This is capped at £50, or reasonable costs if the landlord can provide evidence for this.

Early termination of the tenancy agreement – only if requested by the tenant. Landlords can only charge for the rent to cover the void period until a new tenant is found.

What fees are banned?

Landlords must pay for all costs associated with setting up a tenancy. All of the following fees have been abolished:

• Tenant and guarantor reference checks
• Tenant and guarantor credit checks
• Renewal of tenancy agreements
• Inventory checks
• Check-out procedures
• Professional cleaning, although landlords can ask that the property is cleaned to a professional standard
• Administrative costs of chasing late rent payments

What if I am already in a tenancy agreement?

The tenant fee ban applies to all tenancies, new and existing, so you should not be charged any fees.

If you took out your tenancy agreement before June 2019 and paid a bigger deposit, your landlord must return the excess amount.

What happens if I am charged a banned fee?

If your landlord or agent charges a banned fee, they have 28 days to return it. If they don’t, they could be fined up to £5,000 for a first breach of the ban, and up to £30,000 for additional breaches. They may also be banned from renting properties in the future.

Landlords are prevented from serving an eviction notice if they have charged a banned fee and not paid it back.

If you think you have been charged a banned fee, you should write to your letting agent or landlord. Make sure you can provide evidence of the fee you have been asked to pay.

If that doesn’t work, complain to the property redress scheme to which your letting agent belongs. The two main ones are The Property Ombudsman (TPO) and The Property Redress Scheme.

It is trading standards that are responsible for enforcing the tenant fee ban. If you are getting nowhere with your letting agent or have been charged an illegal fee directly by your landlord, contact the trading standards department in your local authority. You can find your local trading standards authority here.

If all else fails, you can take your letting agent or landlord to a First-Tier tribunal. Beware that this can be a lengthy and potentially expensive process.

If you are a landlord looking for guidance to let in London, contact Kubie Gold, and we’ll be happy to help you.