Century21 Putney explains the ramifications
An informal survey of walk-in clients in our agency on Upper Richmond Road has made it clear that many landlords with both large and single-property portfolios are completely unaware of the tenant fee ban going into effect on 1st June. Below are highlights of the Tenant Fee Act 2019 and suggested ways to address some of those changes from a landlord's perspective.
The Tenant Fee Act 2019 was created to protect tenants from nearly all fees normally charged to them by estate agencies. However, the act goes beyond agency fees and also sets a new maximum deposit amount of 5 weeks (down from the standard 6-week deposit) with the exception of higher-end properties renting for more than £4166 per month. For tenants currently in a property who are up for tenancy renewal in the next 12 months, landlords and estate agencies are required to reduce/refund the deposit held to 5 weeks on the renewal of the lease . For those in longer-term agreements ending after 31 May 2020, deposits will need to be reduced by 31 May 2020 .
Another change to deposits means that no additional deposit may be requested for tenants with pets .
For landlords who welcome pets or are not comfortable with a smaller deposit should consider an alternative to the standard deposit scheme by using a no-deposit alternative. A no-deposit bond can attract more tenants (by reducing the up front cost from 5-weeks' rent to 1-week rent for the tenant) and at the same time increase the level of damage protection to 6-weeks' rent or more. Contact Century 21 Putney at 02088705665 or firstname.lastname@example.org to learn more about this option which comes at no additional cost to landlords .
Looking beyond security deposits, the Tenant Fee Act 2019 also states that tenants may no longer be charged fees for reference checks, set up of tenancy agreements, check-in fees, check-out fees or fees for inventories.
In fact, the only fees that tenants may be charged for are for tenancy agreement changes (capped at £50), late fees (capped at 3% interest above the Bank of England rate) or for lost keys (capped at “reasonable costs” - but only allowed to be charged if this is specified in the tenancy agreement.)
At Century 21 we have never charged exorbitant tenant fees and therefore are not increasing fees to our landlords who use our very successful fully managed lettings service. We look forward to more targeted regulation and eventually formal qualification requirements for estate agents to increase the level of the entire industry to that seen elsewhere in Europe and North America.
Century 21 Putney and Fulham is a member of the National Approved Lettings Scheme and The Property Ombudsman and has been trading for 4 years at 140 Upper Richmond Road in Putney. Century 21 Putney is part of the world's largest networks of estate agents, with around 8,000 offices and 111,000 sales professionals spanning 81 countries worldwide.
The full 59-page guidance from the government is available here: TFA_Guidance_for_LandlordsAgents.pdf
The full text of the Tenant Fee Act is available here: www.legislation.gov.uk/ukpga/2019/4/pdfs/ukpga_20190004_en.pdf
May 24, 2019