Landlords – how does the Tenant Fees Act 2019 affect you?

June 1 sees the Tenant Fees Act 2019 come into force.

If you are a landlord of residential properties let on Assured Shorthold Tenancies (AST), you will be affected by this new piece of legislation.

The key provisions of the Act restrict the kinds of payments that landlords and letting agents can require and prohibit certain arrangements in connection with the letting of housing in England.

It also sets out stringent regulations for the treatment of holding deposits - deposits paid to reserve a property prior to the signing of a tenancy agreement.

Liz Shaw, property litigation solicitor at Wake Smith, looks at some of the changes it brings for landlords and tenants.

Liz said: “The Tenant Fees Act 2019 is due to come into full force on 1 June 2019.

“It will restrict the payments that Landlords can require from Tenants and the amount that may be taken as a holding deposit for most ASTs in England.

“The provisions apply immediately to the grant of any new tenancies with a grace period of over one year for existing tenancies.  The Tenancy Deposit will be capped at 5 weeks rent if annual rent is less than £50,000 or six weeks rent if annual rent is £50,000 or more.

“Fees are also restricted for certain default offences (loss of keys etc), fees for variation, assignment etc payments on early termination, council tax, utilities, TV licence and payment for landline phone, internet, cable or satellite TV.

“In relation to Section 21 Notices, whilst they still exist, a Landlord will not be able to serve a notice to terminate an AST so long as all, or part of, a prohibited payment or holding deposit has not been repaid, or (without consent) applied towards the rent or tenancy deposit.

“The prescribed form will be amended to reflect that a Landlord may not use it if prevented from doing so pursuant to The Tenant Fees Act 2019.”

For further advice please contact Elizabeth Shaw at elizabeth.shaw@wake-smith.com or on 0114 224 2041.

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