Tenant Fees Act – top questions answered

The Tenant Fees Act came into force on 1 June 2019. It bans tenants’ fees to new and renewed tenancy agreements signed on or after this date.

The Tenant Fees Act aims to reduce the costs tenants face initially and during their tenancy agreement, so tenants can see what a property will cost them in the advertised rent with no extra hidden fees.

We sat down with Rose Jinks, the property and housing expert from Just Landlords, to answer the industry’s questions on how the Tenant Fees Act will affect renters, why people are worried it will cause rent prices to soar, and the consequences for landlords and letting agents if they illegally charge fees.

Q. Could you start by telling us more about the Tenant Fees Act?

A. The Tenant Fees Act was introduced on 1 June 2019 across England. It will ban landlords and letting agents from charging upfront fees to tenants for tasks such as viewing a property, reference checks and tenancy agreements.

Q. How will these changes affect people who are in the renting market?

A. The Government has introduced the tenant fees ban in order to try and make renting cheaper for tenants. So, when they go into a new rental property, they don’t have to pay the high fees that they’re currently being charged for these administration tasks by their landlords or letting agents. So, the aim is to make the private rental sector more transparent, fairer and more affordable for those who are renting the homes.

Q. Why are people worried that the Tenant Fees Act will cause rents to rise?

A. Across the industry, we’ve done research and almost half of people believe that rent prices are going to rise as a result of the tenant fees ban. That’s because letting agents can no longer charge tenants fees, and landlords can’t charge the tenants, so letting agents may charge landlords more money to complete these tasks. Landlords will still need to get references for the tenant from somewhere, so they may have to foot that bill themselves, so they could put the rent prices up as a result.

Q. What are the consequences for letting agencies and landlords if they charge tenancy fees after 1 June?

A. The consequences of not complying with the new Tenant Fees Act are that landlords and letting agents could face a charge of up to £5,000 as a civil penalty for failure to comply. That’s for the first offence – if they continue offending and breaching the new law, they could face prosecution or a criminal penalty of up to £30,000.

Q. Do you have any advice for people who are renting?

A. We always tell private tenants to do their research online to try and understand their rights and responsibilities, to understand how these legal changes will affect them. If they’re using a letting agent, always use an accredited one that belongs to an industry-recognised organisation.

The GOV.UK website has more information about the Tenant Fees Act.