As the bill to ban charging fees to tenants makes its way through Parliament, it has been discussed, debated and loaded with extra details. The latest amendments to the new legislation add extra layers of complexity and, in their desire to further protect the rights of tenants, have the potential to hit landlords and their agents hard.
There are three main additions at this stage. Let’s consider each in turn.
- Where damage is caused to a property or its fittings, agents or landlords will only be able to charge a reasonable sum to recover the costs and must provide evidence of the cost to the tenant.
Quoting an example that has caused landlords much consternation, The Department for Housing, Communities and Local Government, says tenants can be charged £60 for smoke alarms that could be acquired free of charge. No mention is made of who must stand the costs of labour to replace smoke alarms. There’s just that loose term “reasonable”.
We expect landlords to end up out of pocket unless they hold onto every receipt and adopt a DIY approach to repairs and maintenance.
- Where an unlawful fee has been charged, monies must be refunded to the tenant within 7–14 days.
This amendment is interesting because there is still no clear definition of what constitutes a fee – and will, therefore, be banned – and what is a lawful charge. Campaigns by groups such as ARLA Propertymark have failed so far to protect the legitimate interests of our industry, but work continues despite public and Parliamentary opinion seeming always to favour the rights of tenants.
- Any deposit must be limited to the equivalent of 6 weeks’ rent.
Although we understand the reasoning behind this move, it does limit the commercial decisions landlords and agents can make. As landlords and agents, we are working in a housing market and subject to market-driven costs, but it’s a market where our freedom to charge market rates is being curtailed.
If you would like to discuss how this affects you or have any questions relating to the Tenant Fee Ban. Please get in touch.