Tenant Fees Bill introduced into parliament

2 May 2018

The Tenant Fees Bill, which had its House of Commons first reading on 2 May 2018, will among other key measures, end letting fees. All proposals relate to England only. The ban on letting fees will apply to assured shorthold tenancies and licences to occupy in the private rented sector. Documents related to the Tenant Fees Bill are also available.

The bill, which reflects feedback from a recent public consultation and pre-legislative scrutiny from the Housing, Communities and Local Government Select Committee, includes provisions that will:

• cap holding deposits at no more than one week’s rent. The bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
• cap the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred.
• create a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last five years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution.
• require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal.
• Prevent landlords from recovering possession of their property via the Housing Act 1988 s21 procedure until they have repaid any unlawfully charged fees.
• Enable the appointment of a lead enforcement authority in the lettings sector.
• Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
• In addition, local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement.
• Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:
  
  • a change or early termination of a tenancy when requested by the tenant; 
  • utilities, communication services and council tax; and
  • payments arising from a default by the tenant such as replacing lost key.

According to the Ministry of Housing, Communities and Local Government, the new measures are subject to parliamentary timetables and will be introduced into law next year.

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