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New rental property charges come into force

From June new renters in England and those renewing their tenancies will not have to pay any upfront fees before they take up their tenancy.

The Tenant Fees Act, which comes into force on 1st June 2019, introduces a ban on all tenant fees, including administration charges and agency fees.

It eliminates the fees that were previously payable for reference and credit checks, fees that could run into hundreds of pounds.

There will also be caps on how much landlords and agents can ask for as a security deposit and rent in advance.

Tenancy deposits will be limited to a maximum of 5 weeks rent where the annual rental is less than £50,000, or 6 weeks rent above this amount.

Holding deposits will be limited to 1 weeks rent and must be returned to the tenant within 15 days, unless previously agreed in writing. Payment can be made directly back to the tenant or put towards the first month’s rent or the security deposit.

The landlord will only be able to keep the holding deposit if the tenant pulls out of the tenancy, fails a right to rent check or provides misleading information that affects their ability to rent.

Landlords are no longer able to charge tenants for obtaining references or carrying out inventory checks. The only fees payable are:

Late rent fees – where the rent is more than 2 weeks late the fee can be up to 3% plus the Bank of England base rate.

Lost keys – the cost of replacement keys/security devices can be charged back to the tenant, but must be supported by a receipt.

Changes to tenancy – charges may be made up to £50 for changes such as adding a new tenant, or allowing a pet. Charges above £50 may be made providing the landlord can justify the expenditure. These charges do NOT apply to tenancy renewals or changes to the length of the tenancy.

Tenants who paid more than 5 weeks rent as their deposit will be entitled to a refund of the excess if their tenancy is renewed after 1 June.

Landlords breaching the new rules face fines of up to £30,000.

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