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The Tenant Fees Act 2019 sets out the government’s approach to banning letting fees paid by tenants in the private rented sector and capping tenancy deposits. It will come into force on 1st June 2019 in England only (but it will be able to be extended to Wales).

Note: the Bill is currently passing through Parliament.

It aims to reduce the costs that tenant can face, not just at the outset of a tenancy but throughout. The cost will be clearly visible in the advertised rents with hidden costs being eliminated with the idea being to a) ensure that the fees charged reflect the real value of the services provided b) encourage letting agents to compete for landlords’ business and c) rebalance the relationship between landlord and tenant.

The Act defines a tenancy (for the purpose of the Act) as the following;

  1. Assured shorthold tenancies;
  2. Licences (for example lodger lettings);
  3. Student lettings provided by a specified educational institution.

The Act does not apply to:

  1. Contractual tenancies (used for company lets);
  2. The property is not going to be the only or principle home of the individual;
  3. An assured tenancy (where no s21 notice is ever available to the landlord).

The Act not only controls what payments a landlord or letting agent may require “in connection with a tenancy of housing in England”such as rent and security/holding deposits, or when a tenant breaches a contract but also restricts what third-party contracts a tenant or guarantor may be required to be bound by for services and insurance.

So tenants will not be charged for the following:

  1. Accompanied viewings;
  2. Receiving an inventory;
  3. Signing a contract;
  4. Renewing a tenancy.
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